Evaluating the developmental potential of the automotive industry in South Africa: A product space and location framework approach

Date
2021-03
Journal Title
Journal ISSN
Volume Title
Publisher
Stellenbosch : Stellenbosch University
Abstract
ENGLISH ABSTRACT: There has been and still is much controversy regarding the effectiveness of industrial policies to develop industries, but in the case of the South African automotive industry, the industry is regarded as being defined by industrial policies. Since the implementation of the first industrial policy program in 1995, the Motor Industry Development Programme (MIDP), the automotive industry has grown to become one of the most significant contributors to South Africa's GDP. The MIDP was followed by the Automotive Production and Development Plan (APDP) in 2013 and the revised APDP in 2021, for which the aim has been to develop the local automotive value chain. The South African Automotive Masterplan (SAAM) was developed as the automotive vision for 2035 but can only be realised if sufficient industrial policies supporting the plan's objectives are put in place. Although the South African automotive industry is regarded as an example where industrial policy programs were mostly successful, industrial policymaking is still regarded as a "learn by doing" or a "doomed to choose" process. Therefore, it can be assumed that there is still a need for more decision support tools. Thus, this study aimed to evaluate how the Input-Output Product Space (IO-PS) framework and Location Determinants Evaluation Framework (LDEF) could support policy decision making by applying the frameworks to the South African automotive industry and what the strengths and the weaknesses of these frameworks are. Firstly, the IO-PS framework was applied to the South African automotive value chain, and automotive body parts were identified as a possible development area. Secondly, the LDEF was used to determine the location success factors needed to make South Africa a viable location for manufacturing automotive body parts. The output from the frameworks was evaluated, and it was concluded that the IO-PS supports decision- making in selecting opportunities with the highest probability of structural growth. However, it is not successful in identifying products that cannot be exported due to physical attributes. The LDEF was deemed to successfully guide the consideration of location-, market- and location interaction success factors, although the process of applying the LDEF is cumbersome and time-consuming. Other strengths and shortcomings were identified, and areas for future work were suggested.
AFRIKAANSE OPSOMMING: Daar is ‘n geskiedenis van omstredenheid in verband met die sukses van nywerheidsbeleid vir ekonomiese ontwikkeling. In die geval van die Suid-Afrikaanse motorbedryf word die industrie geag as gedefinieer deur nywerheidsbeleid. Sedert die aanvang van die eerste nywerheidsbeleid program in 1995, die Motornywerheid-ontwikkelingsprogram (MNOP), het die industrie een van die groot bydraers tot Suid-Afrika se bruto binnelandse produk (BBP) geword. Die MNOP is gevolg deur die omvattende produksie- en ontwikkelingsplan vir die motorbedryf (APDP) in 2013 en die hersiene APDP in 2021. Die doel van die APDP is om ‘n meer gevestigde plaaslike waardeketting in die motorbedryf te skep. Die meesterplan vir die Suid- Afrikaanse motorbedryf (SAAM) was ontwikkel om die visie van die motorbedryf in Suid Afrika vir 2035 te definieer. Die visie kan slegs behaal word indien genoegsaam nywerheidsbeleide in plek gestel word om die doele van die plan te ondersteun. In die geval van Suid-Afrika word die motorbedryf gekenmerk aan die sukses van nywerheidsbeleid programme, alhoewel die proses om nywerheidsbeleid te formuleer steeds beskou word as ‘n proses van “leer deur te probeer” en ook “gedoem om te kies”. Dit kan dus aanvaar word dat daar steeds ‘n behoefte vir besluit-steun-hulpmiddels is. Die doel van hierdie tesis was dus om te evalueer hoe die Inset-Uitset Produkruimte (IO-PS) raamwerk en ‘n raamwerk vir die evaluering van liggings bepalers (LDEF) toegepas kan word om beleidsbesluitneming te ondersteun deur die raamwerk toe te pas op die Suid-Afrikaanse motorbedryf en sodoende die sterk en swakpunte van hierdie raamwerke te identifiseer. Die IO-PS raamwerk was toegepas op die Suid-Afrikaanse motorbedryf waardeketting. Hierdie toepassing het gelei tot die identifisering van die motorvoertuig bakwerk industrie as ‘n moontlike ontwikkelingsarea. Daarna was die LDEF gebruik om te bepaal watter ligging sukses faktore benodig word om die bakwerk industrie suksesvol in Suid Afrika te maak. Nadat die raamwerke toegepas is, is die sukses van die raamwerke om nywerheidsbeleid besluitneming te ondersteun evalueer. Die gevolgtrekking was dat die IO-PS raamwerk wel steun kan bied om geleenthede met die meeste potensiaal vir ekonomiese groei te identifiseer. Die grootste tekortkoming van die raamwerk is dat dit blind was vir produkte wat nie uitgevoer kan word as gevolg van fisiese eienskappe van die produk. Die gevolgtrekking was gemaak dat die raamwerk vir die evaluering van liggingsbepalers suksesvol was om die proses te lei om ligging, mark en interaksie faktore te evalueer. Dit was egter ‘n omslagtig en tydrowende proses om die raamwerk toe te pas. Ander sterkpunte en swakpunte van die raamwerke is ook geïdentifiseer en verdere studies voorgestel.
Description
Thesis (MEng)--Stellenbosch University, 2021.
Keywords
automotive industry in South Africa, industrial policies, Motor Industry Development Programme (MIDP), Input-Output Product Space (IO-PS) framework, Location Determinants Evaluation Framework (LDEF), UCTD, Automotive industry -- South Africa, Motor industry -- Development, Industrial policy -- Developing countries, Decision support systems
Citation