Why plan for South African-built trucks ‘may not happen’
Industry executives say trucks do not boast the economies of scale of car manufacturers
Government plans for a revised local truck manufacturing strategy may never be carried out because of feasibility problems, UD Trucks MD Gert Swanepoel said on Tuesday.
While heavy vehicles are assembled predominantly from imported kits, the Department of Trade and Industry is anxious to increase use of South African-built components.
At present, local value, including parts, labour and energy, is little more than 10% of the vehicles’ total production cost. This compares unfavourably with the average 38% local content in South African-made cars and bakkies, which Trade and Industry Minister Rob Davies believed was inadequate. He wanted to raise that to at least 60% by amending the Automotive Production and Development Programme and its successor (from 2021 to 2035).
He wants trucks to be included in the next stage of policy. Truck industry executives, however, have argued that the plan is not viable. Their industry does not boast the economies of scale enjoyed by car and bakkie makers, where seven major producers and a couple of peripheral companies last year produced 550,000 vehicles. By contrast, nearly 20 truck firms built about 30,000 trucks.
Swanepoel said while companies would like to significantly increase the use of South African-sourced components, it would be hard to justify.
"The reality is that the numbers don’t always add up. We have achieved some small successes but we must recognise that what the [department] wants might not happen."
Marketing director Rory Schulz said: "We think the status quo will remain."
Schulz said local truck makers were trying to identify common components they could all use, to justify local production. But gains had been small. For example, talk of a common 80-litre fuel tank had been complicated by the need for different specifications.
The government also had to recognise that manufacturing decisions had to fit in with the needs of parent truck and bus companies around the world.
Schulz predicted the new-truck market would grow by 1.5% in 2018.