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BMW plant. Picture: SUPPLIED
BMW plant. Picture: SUPPLIED

The economics around SA’s automotive sector is the focus of this edition of the Business Day Spotlight. 

Our host Mudiwa Gavaza is joined by David Furlonger from the Financial Mail, who specialises in SA’s automotive industry. 

The discussion begins by looking at factors affecting the local automotive sector. 

Furlonger says SA has not been immune to the supply chain challenges experienced globally.

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Covid-19, the war in Ukraine and shortages of key automotive parts pose risks to the motor industry’s planned growth. In light of those headwinds, the Automotive Business Council (Naamsa) has asked for a review of the industry’s master plan, saying its goals may no longer be feasible in the allotted timespan.

Furlonger explains that the master plan had been based on industry performance from 2018, a completely different reality to today. As such, Naamsa was asking for the plan, which started in 2021, to be revised to reflect lower production numbers as a result of Covid-19.

Mudiwa Gavaza. Picture: DOROTHY KGOSI
Mudiwa Gavaza. Picture: DOROTHY KGOSI

With regards to the ongoing war in Europe, Furlonger says Russia and Ukraine have a direct impact on the automotive sector given that both are big suppliers of resources such as palladium and inputs for semiconductors. While the industry has multiple sources for each of the inputs, disruptions due to the war have had a bearing on global supplies. 

Topics of discussion include: supply chains issues in the automotive sector; disruptions caused by the war in Ukraine; import versus export of locally produced vehicles; consumer demand; and an outlook for the sector. 

The discussion ends with a look at dynamics in the consumer market, given the surge in used-vehicle demand caused by the pandemic and how that has fed into manufacturing. 

Engage on Twitter at #BDSpotlight

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 Business Day Spotlight is a MultimediaLIVE production.

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