Erwin urges pacts to keep SA car industry afloat
PRETORIA – The continued survival of South Africa's automotive industry was at risk as the country failed to speedily enter into regional trade relationships in Africa, former trade and industry minister Alec Erwin has warned.
“This is the most important strategic opportunity we have to seize. We lose it and we are finished,” he told the National Association of Automobile Manufacturers of South Africa conference at the Festival of Motoring.
Erwin, now a director of strategic advisory and investment holding company Ubu, said the trade and industry department had formed a task team and would be working with the African Association of Automotive Manufacturers to “move hard and fast” to make proposals to African trading group partners.
He stressed the need for South Africa to have a specific trading arrangement in Africa, which was not just a trading arrangement, but created an African automotive assembly industry.
“If we do that, we have our industry forever. If we don't, in 10 years we may not be here as some relative economy like Brazil, Indonesia or Turkey decides they are going to outperform South Africa,” he said.
Erwin said South Africa needed to think about its strategy and galvanise itself into action quickly, because the African Continental Free Trade Agreement had the intention to lower 90 percent of all tariffs to zero in six to 10 years. He said South Africa could in a few years outcompete everyone in Africa, because it would have zero tariff access, but three years later the whole of Africa would revolt against it.
Erwin said an ideal vision would be, for instance, for 200 000 units a year of a specific vehicle model to be manufactured in Nigeria that was supplied to a group of countries, including South Africa, and 150 000 units of another to be manufactured in South Africa and supplied to the same group of countries.
- BUSINESS REPORT