South Africa’s Component
Manufacturing Landscape:
Challenging the Past to improve the
future.
Dr Johan van Zyl
President : NAAMSA
CEO Africa Region: Toyota SA Motors
2014-10-14
What we Know …….
World Leader in fiscal policies and fiscal
compliance
Fundamental requirements for economic
growth
Labour Cost is Worst of BRICS
Source: www.tradingeconomics.com
Find our Competitive Advantage
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Strength lies within….
SWOT Analysis
Weakness
Strength

Build to print industry
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Assembler culture
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Limited skills and resources
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Low local content (value added)
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International not competitive
Threat
Availability of basic
Raw Materials
Availablity of basic raw materials
International certification of
management systems
Strong automotive assembly
experience
Opportunities
Mineral Resources is Key
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Political situation
High crime level

Free capacities in Asia and
Europe
Monopoly situation of suppliers
Price increases
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Wide supplier base to the 7 OEM‘s
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Export of single components
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Local OEM‘s to use common
suppliers
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Localisation of current CKD parts
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Currency development
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APDP / BBBEE

IPAP Initiative to support supplier
Why……..
Our Resources
Lead
12th of 38 countries
89
67
45
3
12
19
1718
1516
14
1213
1011
22
2021
27
2526
2324
2829
34
3233
3031
3738
3536
Iron
Export
Destinations:
6th Largest of 50
Export
Destinations:
LCR = 98% China, Europe
China, Europe,
Japan, Asia-Pacific,
Middle East, South
Korea
LCR = 35%
Example – LA
Batteries CIM<1
Beneficiation = Biggest Opportunity
Synthetic Fuel
Coal
Copper
45
43
6th of 33 countries
36
34 35
20th of 45 countries
1
2
4
5
7
9
12
8
14 15
18
20
22 23
25
27
Aluminium
LCR = 9th4%
of 43 countries Resin
33 34
27 28
Compounding
23
Export
Destinations:
LCR = 58%China, Europe
43
41 42
16 15
13 14
5
3 4
1 2
9
7 8
19
21 22
Export
Destinations:
LCR = 41%China
Scenario……..
Beneficiation: 103,000t / year
R 2.5 billion / year
Main Commodities
If reduced
by 10%
Ave
kg/Vehicle
Local (40%)
Import (60%)
Total
Typical Vehicle
Average
Steel
Aluminium Copper
Resin
Other
Materials
290
96
16
3
163
540 (65%)
139 (59%)
12 (42%)
65 (96%)
108 (40%)
830
235
28
68
271
Typical Total Vehicle Average: 1432 kg
Items to Fix……..
Competitive
Localisation
Automotive Growth
Technology Support
• Collaboration
• Investment
• Skills
Commodity Pricing
• Why Import Parity?
• Pay US$ for ZAR Cost base?
• Beneficiation
7
Thank You