Partnerships required to revitalise Gauteng’s auto sector

3 February 2023

Gauteng is using the automotive sector as a catalyst for economic growth and job creation. However, there is room for more private sector participation as the province moves ahead with its aims of realising its 2030 plan.

Speaking at the recent National Association of Automobile Manufacturers of South Africa South African Auto Week, MEC for economic development in Gauteng, Tasneem Motara, shared the province’s economic vision with the conference delegates. “There remains a huge need to trigger the economic recovery of our province and reposition it as the centre of industrialisation through the auto sector.”

The province’s 2030 and beyond plan is a blueprint to ensure that it remains South Africa’s economic hub. Among its aims are to invest in transport nodes to better serve underprivileged communities. At the same time, it named the automotive, aerospace, and defence sectors as being among its ten targets to help grow employment.

Motara explained that, in producing what was then a ten-year plan, the province engaged with numerous stakeholders.

One of the tools at its disposal are Special Economic Zones (SEZs), which Motara says will boost manufacturing, increase exports, grow employment, and expand social infrastructure developments in support of the province being the gateway to Africa. “These are a critical enabler of jobs.”

Together with the private sector, the hubs have been a success, such as the Tshwane Automotive SEZ, which was established in May 2020 and was Gauteng’s first such hub, she adds. In 18 months, it attracted 12 investors, creating more than 5,000 direct jobs during the construction phase. Some 40% of the construction contracts, worth R1 billion, went to black female-owned enterprises.

The hub has had a positive impact in terms of contributing to jobs created across the supply chain, as well as local content, and has seen the entry of three new foreign companies that were previously strangers to South Africa’s shores. Toyota Motors has started the second phase of its development, which will also focus on “deepening economic participation through the development of innovation,” says Motara.

The Ford Motor Company, which recently started production of the next-generation Ranger, has invested R15.8 billion in South Africa, the last tranche going into the Tshwane SEZ, at which its facility boasts 585 robots.

To continue growing hubs, which bring with them other advantages such as the development of communities and a supporting ecosystem, government must create additional infrastructure, she says. To this end, the province will be “ensuring the participation of local communities”.

However, the motor sector has been hard hit by the recent Transnet strike as well as downtime on the railways due to cable theft. Motara said that government is working on a solution and has prioritised the matter as the state logistics company needs to be brought up to speed so that its rails and ports work efficiently, helping enable Gauteng’s vision. At the same time, government, in the Medium-Term Budget Policy Statement, committed R5.8 billion to it to repair aging infrastructure.

Government is making progress. However, to meet its aims, more private sector partnerships are required, which are seen as critical. “We wish to build on great partnerships with private sector, civil society, universities, research institutions, and innovation centres to maximize the potential of future generations. We invite you to join us on this ambitious economic exercise.

“As the leading auto manufacturing hub in the country, we are committed to the development of our projects to tackle the triple challenge of poverty, unemployment, and inequality,” Motara said.