Tshwane Automotive City expected to attract tens of billions of rand

The planned Tshwane Automotive City, a joint project between the Gauteng provincial government and the Tshwane municipality, may become a special economic zone focusing exclusively on the automotive industry.

Barlow Manilal, the chief executive of the Automotive Industry Development Centre, confirmed this yesterday at an India-South Africa automotive component workshop, adding that the project was expected to attract investments in excess of R50 billion over 30 to 50 years.

Manilal said that the project extended from Rosslyn, about 30km from Pretoria, to Wonderboom Airport, and was probably one of the biggest public-private partnership programmes in the sector.

Another motor manufacturer and five automotive component manufacturers are considering establishing a manufacturing presence in South Africa.

Sake van der Wal, the deputy director for investment promotion and facilitation at Trade and Investment South Africa at the Trade and Industry Department, told the workshop that a motor manufacturer was considering establishing a manufacturing presence in the planned multi-vehicle plant in East London.

Van der Wal said that the automotive component manufacturers were considering manufacturing locations in Gauteng, KwaZulu-Natal and Port Elizabeth.

He declined to identify any of the potential investors in South Africa’s automotive sector but stressed the prospective investments by the vehicle parts manufacturers were not related to the plans by an additional motor manufacturer to start up a new assembly plant in South Africa.

Van der Wal indicated that a decision on these investments was possible by the middle of this year.

He confirmed the automotive component manufacturers had ties with locally based motor manufacturers but wanted to deepen their presence in the industry. He declined to comment on the types of automotive components these companies produced.

A new greenfields 50 000 unit a year multi-vehicle assembly plant in the industrial development zone in East London, operated by an outsourced assembler, was first mooted at SA Automotive Week in 2009.

The plan is that the plant will produce a number of different cars locally for several newer entrants to the South African market but its total annual production would exceed the 50 000 units a year annual production threshold to qualify for incentives in terms of the government’s new Automotive Production and Development Programme (APDP).

It will be the first automotive original equipment manufacturer plant established in South Africa in the past 40 years and will boost job creation in the vehicle sector and automotive exports.

Roger Pitot, the executive director of the National Association of Automotive Component and Allied Manufacturers, said that possible co-operation between South African and Indian automotive component manufacturers could involve investment, mergers and acquisitions and joint ventures.

He said that with the growth in the automotive industry, major investment would occur.

He said South Africa was established as a capable supplier of automotive components and vehicles and the automotive sector was expanding its capabilities and gearing up for the higher production and localisation levels of the APDP.

Pitot added that 10 new large multinational suppliers had started production in South Africa in the past three years and he expected demand for new technology and expertise to increase.