Tasez

President Cyril Ramaphosa

TASEZ welcomes the State of the Nation address

By Mandla Mpangase The Tshwane Automotive Special Economic Zone (TASEZ) takes careful note of the key messages raised by President Cyril Ramaphosa in this State of the Nation address in Cape Town last night, 6 February 2025. One of the issues he raised was the need to ensure that growth creates jobs for all, especially for young people. “We are going to answer that call,” says TASEZ CEO, Dr Bheka Zulu. “Our aim in the special economic zone is to encourage investment within the global automotive manufacturing sector and in so doing, create jobs for the people of the City of Tshwane in general and the local communities of Eersterust, Mamelodi and Nelmapius in particular.” The president noted that the success of the Presidential Employment Stimulus shows how public employment programmes can create meaningful work that generates a wider benefit and contributes to sustainable employment.  “The employment stimulus has created almost 2.2 million work and livelihood opportunities through innovative models that provide high-quality work to participants.”  One of the industries of the future is in the automotive manufacturing space, with the setting of limits to carbon emissions and the rise of new energy vehicles, particularly in the European market, something TASEZ is directly involved in monitoring and supporting. President Ramaphosa noted: “To create jobs, we must leverage our unique strengths and our unrealised potential to build the industries of the future – green manufacturing, renewable energy, electric vehicles and the digital economy.” His comments about finalising a modernised and comprehensive industrial policy that drives economic growth by “focusing on the opportunities in localisation, diversification, digitisation and decarbonisation” is of particular importance to the automotive manufacturing industry. The South African Automotive Masterplan 2030 has set targets to deal with all of these issues: Grow South Africa’s vehicle production to 1% of global output Increase local content in South African-assembled vehicles to up to 60% Double employment in the automotive value chain Improve automotive industry competitive levels to that of leading international competitors Transformation of the South African automotive value chain Deepen value addition within South Africa’s automotive value chains In addition, South Africa will be working towards the full implementation of the African Continental Free Trade Area (AfCFTA), “which will tear down the barriers to trade on our continent”, the president said. “As the most industrialised economy in Africa, we are positioning ourselves to be at the centre of this new and growing market.” As a global role player, this is of particular importance to TASEZ. South Africa has been a key player in the development of AfCFTA’s automotive framework, which aims to enhance trade within the continent.  The automotive sector is one of the country’s largest economic sectors. According to the Automotive Business Council, naamsa, the automotive industry contributes 5.3% to GDP [3.2% manufacturing and 2.1% retail], with exports equating to 14.7% of South Africa’s total exports – reaching 148 international markets. The manufacturing segment of the industry employs 110 000 people across its various tiers of activity and combined with the industry’s strong multiplier effect, is responsible for 457 000 jobs across the South African economy. With the national goals of making the economy more inclusive, TASEZ focuses on empowering those who were “deliberately excluded from playing a key role in the economy of their own country”, to quote the president: black industrialists; small, medium, and micro enterprises (SMMEs); women; the youth; and people with disabilities. TASEZ, in its Phase 1 development supported SMMEs to the tune of R1.7-billion and created 5 500 construction jobs and 3 311 permanent jobs for people from the local communities. Of the construction jobs, 18% were women, 60% were youth, and 0.86% went to people with disabilities. Of the permanent jobs, 32% went to women, 65.47% to youth, and 0.83% to people with disabilities. “As we enter Phase 2 of our development, we remain committed to transforming the sector, opening opportunities for SMMEs and black industrialists, and helping train people for the future,” said Dr Zulu.

SA determined to drive towards new energy vehicles

By Mandla Mpangase Consideration must be given to providing incentives for manufacturers as well as tax rebates or subsidies for consumers to accelerate the uptake of electric vehicles in South Africa. This statement by President Cyril Ramaphosa in his key note address at the South African Auto Week 2024 was greeted by much applause by the industry role players. Speaking at the high-level event in Cape Town on Thursday 17 October 2024, the president recounted the recent economic diplomacy efforts of government globally, including in New York, London and Beijing. “Our experience confirms a greater interest in South Africa’s prospects.” South Africa’s auto industry makes a significant contribution to the country’s gross domestic product, which currently sits at 5.3%, a fifth of the value add within local manufacturing comes from vehicle and component production. The auto industry accounts for around 15% of the country’s total exports.  “[The industry] continues to blaze a trail in strategic economic markets on our continent, in North America, in Europe, as well as Indonesia.” It is also a major employer, collectively employing half a million people directly and indirectly across the value chain. Importantly, “the sector continues to actively support transformation”. The transformation targets have been set out in the South African Automotive Master Plan 2035. The plan sets out a number of targets: “The Automotive Industry Transformation Fund has supported a number of beneficiaries. It has facilitated market access for black-owned and female-owned firms to the value of R4-billion and supported thousands of jobs across the industry.” This year is a milestone for the automotive industry, marking 100 years of vehicle manufacturing in South Africa since the first Model T Ford rolled the assembly line of the Ford plant in Port Elizabeth (now Gqeberha). Industry leaders have shown great confidence in South Africa. Today the automotive manufacturing footprint has expanded exponentially, with international auto companies now major investors in the South African economy. “They have consistently featured prominently at the annual South African Investment Conference, which was inaugurated in 2018,” the president said, adding that “over the past few years, these companies have invested an average of some R8-billion rand a year.” Component suppliers have also invested a considerable amount into the South African economy – about R4-billion a year. However, the industry faces many challenges, including the transition towards decarbonisation, with a move to cleaner, more sustainable fuels and stringent regulations. “Even as the journey to net zero poses a challenge for the auto industry there is, at the same time, immense opportunity. The local automotive sector needs to position itself to take advantage for the demand of electric vehicles (EVs), new energy vehicles (NEVs) and sustainable fuels.” President Ramaphosa noted that this was a government priority. “The automotive industry has a critical role to play in achieving South Africa’s climate targets. We’re committed to working with the private sector to promote the production of NEVs and the development of the necessary infrastructure to support them.” This includes the beneficiation of critical minerals for the production of NEVs and their associated value chains, as well as the production of batteries and green hydrogen fuel cells for EVs. “We are working to finalise comprehensive NEV policy guidelines that include alternative technologies such as hybrids and plug in hybrids, so consideration must be given to incentives for manufacturers as well as tax rebates or subsidies for consumers to accelerate the uptake of EVs.” The president noted that this was not just about creating a greener future, but also about ensuring South Africa remains competitive in the global market. “This is a major industrialisation opportunity for our country and the region as well, particularly within the context of the African Continental Free Trade Area. This will position South Africa as a forward-thinking green economy.”