South African Business 2018 edition

SPECIAL FEATURE
forex issues. It’s getting invigorated
and we have had good meetings
with the Nigerian and South
African governments. They are
serious about curbing used car
sales – that is the drag that keeps
them off the new car market, the
used cars getting dumped.
What other markets is
Volkswagen targeting?
We are focusing on the East
African market, in countries like
Rwanda and Tanzania. Ethiopia is very promising
but their massive dam for the Nile is where they are
spending all their forex at the moment.
Are all South Africa’s OEMs looking north?
All OEMs operating in South Africa have now received
the guardianship of Africa from head office.
They are probably continuously looking up north
to see opportunities. We are not all looking at the
same countries: Ford is looking at Angola and Nissan
is looking at Nigeria.
Is the Department of Trade and Industry
(dti) encouraging an African focus?
The OEMs’ focus on Africa aligns well with the
dti’s review of the Automotive Production and
Development Programme (APDP) – the new APDP
is about regional trade, and that is the most important
aspect for the South Africa OEM industry.
If we don’t get the regional trade and regional
industry right then it’s going to be difficult in the
future. Labour and logistics costs are high but with
regional trade we could offset most of it. We are
pushing the dti for better incentives to help us to
open those markets.
Is Africa the key?
If production stays far below a million cars production
per year, we will never be profitable or
sustainable, so Africa could be the key? When you
look at the number of cars per thousand inhabitants
in most African countries there is opportunity in
places like Kenya and Nigeria. If you take away the
used car drag, there’s no reason why their market
could not grow. If Kenya came to a level like South
Africa they could achieve a market of five or six
hundred thousand.
So you are positive about the future?
Nobody else can do it better than from Africa for
Africa. Although it is a South African initiative, it
needs to be an African initiative. It must benefit the
other countries as well. We are working to refocus
the AAAM to make this a significant organisation that
will bring the auto industry further in Africa. It takes
determination to create an auto industry. If you focus
on it, it will come – there is a real opportunity.
25 SOUTH AFRICAN BUSINESS 2018