Adapt to digital or be left behind — warning to SA auto industry


DURBAN, March 14 (ANA) - South Africa's automotive component supply sector needs to urgently focus on vehicle electronics if it is to meet ambitious new localisation targets.

This emerged at the National Association of Automotive Component and Allied Manufacturers of South Africa conference which continued in Durban on Thursday.

Rajesh Ramkawal, chief operating officer of Yekani, the electronics manufacturer, warned delegates that telemetrics and electronics had become commonplace in vehicles but "smokestack or conventional manufacturers" in the auto supply industries were in danger of being left behind.

He said that by 2020 embedded electronics would account for 35% of the value of a vehicle, with the figure rising to 50% by the 2030.

Ramkawal reminded the conference that the country's new Automotive Masterplan, which comes into force next year, sets a target of 60% of local content by value.

"Where is that 60% of digital electronics going to come from," he said. "Trouble is coming."

He warned that "a massive step change" would be needed to meet the target.

"Automotive electronics (in South Africa) is not keeping up with the evolution… 60% is going to be a serious problem," said Ramkawal. "What button has to be pressed to require beneficiation of electronics in South Africa?"

Mervin Moodley, chief executive of Atlantis Foundries, the automotive castings manufacturer, said greater commitment to localisation - both through investment and partnerships - was needed from car makers if local component suppliers were to succeed in the component industry's priority sectors.

"We need long-term contracts. We need fair and sustainable pricing," said Moodley.

He told the conference that CEOs of the car-makers and original equipment manufacturers (OEMs) said all the right things about localisation, but then their procurement departments continued to source components from lower-cost suppliers overseas, in countries like Turkey and Vietnam, which had already "paid their school fees".

"There are huge research and development investments. Someone has to pay the bill. OEMs have to figure out how they are going to use the (government's motor industry) incentives to bring production to South Africa," said Moodley.

Ramkawal said it was necessary to develop a wide body of skills in the industry, but particularly in processing the big data being generated by vehicle electronics and onboard car sensors.

Rudolph Billau, vice president marketing of Bosch Stuttgart, said frequent exchanges of staff between the multinational’s South African plant in Brits and its other operations globally were assisting in building skills in the country.

Replying to a question from the floor about his company’s commitment to increasing local content, Billau said: “We have clear targets for local manufacture. We have the ability to make quality (in South Africa).”

In an earlier session at the conference, Sharon Modiba, an economic researcher with the National Union of Metalworkers of SA, asked from the floor about what skills workers would need in the digital era.

“There has not been much engagement. There is no clear plan of what skills sets would be required,” she said.

Markus Thill, president of Bosch Africa, replied that education was vital for workers assembling electro-mechanical components, but there was no quick fix.

“It starts at primary school. For megatronics if you don’t have the maths or science…”

He said companies would assist but it would require a great effort from the government.

He said he was heartened by South African President Cyril Ramaphosa’s announcement earlier this year of plans to establish a digital industrial revolution commission to help the country adapt to rapid advances in information and communication technology.

Thill suggested South Africa could learn from the German system of works councils which had been successful in bringing together employees, companies and the government to tackle common goals. 

- African News Agency (ANA)


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