As much as R60 billion could be invested in the South African vehicle and component manufacturing industries in the next five years, according to Andrew Kirby, CEO of Toyota South Africa and president of National Association of Automobile Manufacturers of South Africa (NAAMSA).
In a recent speech at the annual NAAMSA Conference in Kyalami, Kirby said the seven largest vehicle manufacturers are considering R40 billion in direct investments, with an additional R20 billion earmarked for component making.
The industry wants to increase the use of locally-produced components in vehicles.
"We expect local procurement to grow by R12.6 billion in the next five years together with a 14% increase in direct employment, which equates to creating another 16 000 jobs, mainly in the component manufacturing sector as local content grows from 39% to at least 42%."
The component sector needed to urgently develop smaller suppliers, Kirby added, and the industry wants to help establish 500 smaller suppliers with 130 of them black owned. The industry also welcomes an initiative by the local steel industry to investigate the production of automotive-grade steel in SA.
He stressed the importance of being globally competitive in terms of cost, quality, and reliability of supply as several other countries were eyeing South Africa's automotive export markets.
"Growing production volumes, increasing localisation significantly and using the latest technologies in all aspects of the business are vital to transform the South African automotive industry and to this end the aim was increase output from the 610 000 vehicles made in 2018 to 800 000 in 2023," Kirby said.
July's trade data showed a 22% monthly increase in exports of vehicles and transport equipment, to the value of R3 billion.
Some 407 000 people are employed in the vehicle industry.