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STATE-AUTOMOTIVE INDUSTRY PARTNERSHIP Presenter: Dr. David Masondo Date: 09 June 2016 Presentation Structure 1. Who is the AIDC? 2. AIDC Flagship Projects. 3. Significance of state-&-business partnerships in the sector. 4. Economic Importance of the automotive sector. 5. Challenges facing Gauteng based automotive industry (incl. OEMs). 6. Role of the AIDC. Who is the AIDC? • Established in 2001 by Industry & Gov to support automotive industry. • The AIDC is an implementation agency of provincial government • Approx. 170 staff across multiple sites • Asset Base approx. R850 mil. Significance of State-&-Business partnerships in the sector • The state needs business to invest in order to create employment and tax base. INDICATOR GDP Employment Labour Income Tax and Import NATIONAL 7% (R218BN) 500 thousands R83bn R43bn GAUTENG 14% 176 thousand Upstream & Downstream Linkages in the Sector UPSTREAM CORE AUTOMOTIVE Primary Sector (Raw Materials) Manufacturers Mining (E.G. Platinum) OEMs, Component Manufactures DOWNSTREAM Tertiary (sales, after market etc.) After market services (Repairs, auto parts etc.) Leather Finance & insurance Textile Rubber, Paint, Etc. Car hire Source: AIDC’s Tshwane Auto-sector profiling OEMs Products (Excluding HCV and Bus) Products from Gauteng based OEMs Products from Gauteng based components Manufacturers Overhead Systems Interior trim parts Door handles/panels Insulation parts Metal pressing Cockpits Tailgate Covers Door Function Bin Liners Sound absorbers Cockpits Exhausts system Cross Beams Heat shield Fuel lines Engine pulleys Moulded Rubber Spring Steels Injection Moulding Wiring harness Radiator Bolts Floor mats Vehicle Trimming Bumpers s Assembly of Axle Differential Seats HVAC Air ducts Protection fenders Universal Beams Anti-static garment Exteriors Assembly of front Axles Polytherine components Handling Units Catalytic converters Challenges Facing Automotive Sector in SA 1. Market size, 2. Distance from global market, 3. Logistics costs and infrastructure 4. Skills upgrading/training, 5. Transport cost for labour 6. Components Manufacturing in Tshwane opting for Botswana & Lesotho e.g. Euro-plasform, ALC &, Pasdec (Brits) 7. Global economic conditions AIDC’s ROLE 1. 2. 3. 4. Market share – looking into sub-Saharan Africa. Own and operate the Automotive Supplier Park (ASP). Production Efficiency Program (Lean Manufacturing etc.). Skills Development Programme – Own and Operate the Gauteng Automotive Learning Center. 5. Developing Black Entrepreneurs through the Incubation Program (Ford) and another at BMW. 6. Build and support Township-based automotive entrepreneurs (Winterveldt Township Automotive Hub) 7. Tshwane Automotive City (TAC) – Master Plan KEY TASKS 1. Deepening Localization 2. Increase Black-ownership or Transformation Agenda within the Industry 3. Lobby for key supporting infrastructure – Supply Chain Thank You! CONTACTS Dr. David Masondo Tel. 012 564 5287 | Mobile. 072 889 9052 Email. [email protected]