Johannesburg - The government was working aggressively with South Africa’s automotive industry to ensure the success of the industry’s planned creation of a R3.5 billion transformation fund that would allocate funds to develop black ownership in the car industry supply chain and vehicle dealership network.

Mike Whitfield, the president of the National Association of Automobile Manufacturers of South Africa (Naamsa) and managing director of Nissan South Africa, confirmed this on Tuesday adding that everyone the industry had interacted with in government about the initiative had “been very positive” about it.

The leadership of Naamsa announced the initiative in June following discussions with the ANC prior to its policy conference.

Whitfield said Nissan South Africa director of corporate affairs and communication, Wonga Mesatywa, had been part of the automotive industry team that had been involved in discussions with the government.

Mesatywa said there were a lot of details about the initiative that the team was still working through with the government.

Discussions

He said that they hoped to conclude those discussions within about the next four weeks and then host an indaba with the Black Business Council and all other interest groups, including the National Union of Metalworkers of South Africa, to decide on the final product.

“Those are partners we have to agree with in terms of what we are wanting to do,” he said.

Mesatywa denied suggestions by industry sources that the initiative was dependent on government accepting it as an equity equivalent initiative for the ownership pillar of the new broad-based black economic empowerment (BB-BEE) codes.

“We are doing this because it’s the right thing to do. The (BB-BEE) points are consequential. They just come because we are doing the right thing.

“It’s not being done because of the points. It’s being done because we do need to make sure we diversify the supply base,” he said.

Mesatywa said the BB-BEE points vehicle manufacturers would be credited with for the initiative was still under discussion.

Whitfield added that the biggest problem facing the domestic automotive industry today was that there were so few black-owned industrial business that could supply the automotive industry.

“You can find smaller SMEs (small and medium enterprises) but that’s not the issue.

“This venture will only be allowed to invest in downstream and upstream in the auto industry so downstream will be components suppliers and upstream will be the dealerships.

“But it’s not just a dealer but a dealer group and vehicle financing and then sideways in skills development,” he said.

Mesatywa said Naamsa had interacted with the National Association of Automotive Component and Allied Manufacturers, which was looking at its own programmes that they could influence.

However, Mesatywa there was nothing stopping the two organisation coming together at some stage because essentially they were both looking to achieve the same goal.

Whitfield added that many large first tier global suppliers had asked to be part of the initiative.

Absolute pleasure

He said Naamsa had indicated it would be “an absolute pleasure” to accommodate them but not in the first phase of the initiative.

“The reason is very simple. It’s tough enough to get seven of us (vehicle manufacturers) to align and agree so we want to create the foundation and then we can invite them,” he said.

Tim Abbott, the chief executive of BMW Group South Africa and sub Saharan Africa and also a Naamsa member, said in June when the initiative was announced said the fund would be held through a black fund manager with a board of management that included original equipment manufacturers and the government through the trade and industry department.

Abbott said the intention was to expand the initiative in the longer term to also include vehicle importers and major component manufacturers.

BUSINESS REPORT