Automobiles
KwaZulu-Natal’s vehicle manufacturers and suppliers are big players in the market.
Everything about the KwaZulu-Natal automotive and automotive supplier sector is big. The province is home to the biggest vehicle manufacturing company on the continent (Toyota SA), exports nearly half of all South Africa’s vehicles (45%) and employs about 25 000 people.
And then there is Bell Equipment, the Richards Bay company that makes earth-moving equipment of every sort and has grown into a global competitor from modest beginnings as a repair shop on a sugar farm near Empangeni. The company manufactures front-end loaders, tractor loaders, articulated dump trucks and three-wheeled loaders, among other heavy equipment. It also has production plants in the US (in partnership with John Deere) and Germany.
Two other global truck marques have assembly plants in the province: Volvo in Durban, and MAN Truck and Bus South Africa in Pinetown. MAN’s assembly plant focuses on front-engine bus chassis. The company is a major supplier of buses to the South African market and now includes Volkswagen buses and trucks among the products it sells. The company experienced a 23% improvement in sales figures for the first two months of 2010 compared to the year before.
Toyota’s trucks are now branded as Hino, in line with the global strategy. Hino truck sales in Africa have doubled since 2004, with South Africa now ranked fifth in sales for destinations outside Japan.
Keeping MAN and Toyota supplied is the R300-million operation, Duys Engineering Group. This diverse group of companies includes in its brief the supply of truck bodies and truck components and has production plants at New Germany (Pinetown) and Richards Bay, from where it services the mining industry.
Trade & Investment KwaZulu-Natal (TIKZN) estimates that the province’s automotive component manufacturers enjoy a combined turnover approaching R10-billion. International company GUD Filters has a big presence in the province. Headquartered in Prospecton, where more than 1 500 people work at one of its factories, the company has another plant in Pietermaritzburg and a distribution centre in Pinetown that concentrates on exports.
Dunlop runs two large factories in the province: truck tyres are made in Durban (at an 80 000-square-metre facility, with 840 workers); passenger car tyres are manufactured in Ladysmith (at a 77 000-square-metre facility, with 1 160 employees). The Durban factory devotes 40% of production to supplying the truck and earthmoving market. Both plants make about 25 000 tons of tyres with half of the passenger tyres being exported. The Behr Group is another international company in the province. The air conditioning and cooling systems company has a factory and its headquarters in Durban.
Toyota is the top-selling vehicle brand in South Africa and its main manufacturing plant, at Prospecton south of Durban, produces tens of thousands of vehicles for the local and export markets. The plant underwent a revamp and capacity was extended in 2007 with the result that approximately 140 000 units were exported in 2008. In February 2010, the company sold more than 8 000 vehicles in South Africa and exported 5 125. Toyota is responsible for about 60% of South African vehicle exports.
The Durban Automotive Cluster (DAC) is a Section 21 company made up of a partnership between the eThekwini Municipality and the automotive industry in the province. The key aim of the DAC is to make the industry more competitive, with a specific target of doubling the size of the sector in the province by the year 2020. These goals are pursued through programmes such as Localisation, Skills Development, Infrastructure, Transformation and Manufacturing Excellence. The DAC and TIKZN have run joint programmes such as the Automotive Business Retention and Development Week which served to give new skills and support to smaller, black-owned companies operating in the sector.
Outlook
The year 2009 was a very bad one for automotive manufacturers and suppliers. New vehicles sales fell to 395 230 units in 2009, a decline of 29%, while exports fell to 174 947 compared to 284 211 the previous year. Component exports fell from R44-billion (2008) to R28-billion in 2009. Good news in early 2010 was that this trend seems to have been arrested: February sales were up 20.5% on 2009 with 39 312 vehicles sold.
Bakkies and light commercial vehicles did well and bus sales in the build-up to the FIFA World Cup South Africa™ predictably boomed (by 71%).
The national Automotive Production and Development Programme (APDP) will replace the Motor Industry Development Programme. The new policy document includes provisions for the increase in the percentage of local content that is required in the making of vehicles in South Africa. At the moment, up to 65% of content is imported. If this changes radically, there will be more work for South African component companies.
