South African versus Nigerian auto industries
With an annual production of 535 000 vehicles in 2007, expected to rise to 630 000 in 2008, South Africa can be regarded as a minor contributor to global vehicle production which reached 73-million units in 2007. But, locally, the automotive sector is a giant, contributing about 7.5% to the country’s gross domestic product (GDP) […]
With an annual production of 535 000 vehicles in 2007, expected to rise to 630 000 in 2008, South Africa can be regarded as a minor contributor to global vehicle production which reached 73-million units in 2007.
But, locally, the automotive sector is a giant, contributing about 7.5% to the country’s gross domestic product (GDP) and employing about 36000 people. Nigeria is also an importer of some of these vehicles produced in South Africa.
Motor trade sales rose by 20.4 percent year-on-year in September. Statistics South Africa reported on Thursday.
It said the highest annual growth rate was recorded for new vehicle sales (32.7 percent), followed by fuel sales (30.2 percent) and income from the sales of accessories (11.7 percent).
Motor trade sales for the third quarter of 2011 increased by 14.2 percent compared with the third quarter of 2010.
Seasonally adjusted motor trade sales for the third quarter of 2011 increased by 1.9 percent compared to the second quarter of 2011.
The South African industry boasts several unique technologies, such as differential locks for off-road vehicles, aluminium welding technology for radiators, and the ability to design components, such as air cleaners and air conditioners that can cope with the higher temperatures and dust levels in Africa. This gives the South Africa’s automotive industry a number of competitive advantages to international concerns.
Which is what PAN Nigeria and Nigerian Truck Manufacturer(NTM) are trying to offer to West Africa but with little support or patronage from Nigerians in the public sector defying the enabling Act that has no punitive clause.
The introduction of the South African Motor Industry Development Programme (MIDP) in 1995. Key features of the MIDP were:
(a) Reduced tariffs on light vehicles and components, with tariffs being phased down even faster than required by WTO obligations;
(b) Removal of local content requirements;
(c) Duty-free import of components up to 27 percent of the wholesale value of the vehicle;
(d) Duty rebate credits to be earned on exports of vehicles and components and used for duty-free import of vehicles and components.
In effect, the industry has already changed noticeably with the implementation of the MIDP. Imports of vehicles surged dramatically. Many of them brought in using duty-free credits. Likewise, exports of vehicles have increased, particularly for certain manufacturers, and component exports have continued to grow.
Well, since the MIDP worked for the South African it therefore means the patronage by Nigerians rest first with the policy makers, perhaps looking at the West African market for export.