Dave Coffey, NAACAM President
In general, economic prospects remain challenging for the coming year. For the third year in succession, South African domestic new vehicle sales during 2016 recorded a year on year decline and with low growth expectations, economists are predicting more of the same in 2017. There remain concerns regarding the impact of political tensions on business confidence whilst possible interest rate increases and tax hikes in the year will negatively impact consumer purchasing power. There is a bit of light in that some uptick is expected towards the latter half of the year on the back of expected easing off the harsh drought faced by South Africans in the past year and possible rand strengthening and commodity price recovery.
Internationally, volatile economic conditions are likely to prevail during 2017, particularly in the UK, Europe and North America when one considers some of the political changes that occurred in those markets last year. Despite these considerations, the global economic outlook at this stage is cautiously positive and should lend support to South Africa’s improving vehicle export performance which reached a record level in 2016, despite lower exports to Africa. Vehicle exports will remain a function of the performance and direction of global markets - those to Europe, Australasia, the United States, Asia and South America are expected to show further growth in 2017, resulting in some increases in total local vehicle production.
Whilst that provides a level of macroeconomic background, the reality is such factors remain out of our control. What is within our control is the effort we each put into growing our own businesses and the industry as a whole. Of course our main objective, as NAACAM, is to represent members’ interests and to influence the wider operating environment in a ways that facilitate such growth. NAACAM is the credible voice of the automotive component industry in South Africa. In order to attend to key matters, we deploy working groups which are headed up by NAACAM Executive Committee members. In respect of such activities, 2017 is going to be another busy and crucial year, and I would like to reflect on a few that I consider important to us delivering on our objective.
The NAACAM Show taking place from 5-7 April in Durban in conjunction with the National Localisation Indaba is going to be the biggest highlight in the association’s calendar this year. By taking ownership of such an event NAACAM intends to showcase the capability of the South African Automotive Industry with the obvious emphasis on component producers. This is really a practical and tangible way for our wider membership to demonstrate to domestic and global stakeholders, the true potential that exists in the SA supplier base and raise the profile of this sub sector. Major themes of the show this year will include Localisation as well as Black Supplier Development, both of which are needed at a much higher quantum if we are to sustainably grow the SA autos sector. As suppliers we all need to get on board and make this the successful event we believe it can be.
The Black Supplier Development theme is linked to another key issue that continues to impact on our environment. That is the long term transformation of the SA automotive sector. Developments and interactions with authorities over the past year have made it clear that there is no way to escape the reality that this is something to be taken seriously and suitable transformation strategies need to be implemented by members. There is no space for members not to be compliant when accessing much needed government incentives and expectations are that these will get more stringent over time. NAACAM, has and will continue to represent the interests of members in this regard, however the implementation of this representation is now on the front of assisting members with compliance related initiatives. The roll out, and recording for members access through our website, of best practice workshops towards the end of 2016 and continuing into 2017 is an example of this, as is the pilot black supplier development activity to be implemented through ASCCI. These are initiatives that members should take advantage of to boost their own B-BBEE scorecard challenges. NAACAM will also be making recommendations on preferred methods of delivering on the Ownership priority element in the early part of 2017. And of course members are urged to continue participating where applicable in ASCCI activities as this remains NAACAM’s leading initiative and set of programmes in the overall supplier competitiveness improvement landscape.
Through 2016 and into 2017, NAACAM continues to be actively involved in the Post 2020 Automotive Industry Masterplan discussions and associated policy recommendations. This is another flagship activity for the association this year. Besides being part of the Executive Oversight Committee chaired by Trade and Industry Minister Rob Davies, we have already processed significant inputs to the facilitation team through self-standing submissions and presentations as well as participation in a technical level Industry Reference Group. Our views on the necessity for higher volumes and deeper localisation are clearly understood. We will continue to engage with this process as it draws to a conclusion this year and are positive that a balanced outcome will emerge which leverages on the true economic potential of having a vibrant domestic autos components sector.
A further strategic activity that we will move on in 2017 is an African agenda for component manufacturers. The NAACAM-delivered outward trade and investment mission to Nigeria in February 2017 is part of that agenda, and it’s likely that we will plan something similar for the East African market later this year. Furthermore, NAACAM is taking up membership of the newly formed African Association of Automotive Manufacturers (AAAM), and will use this in parallel to drive the interests on SA component manufacturers in Africa.
Before closing, I repeat what I’ve often said through various NAACAM platforms. On the issues I’ve touched on above, as well as others of strategic importance, one has a choice to watch the game or to get involved. I encourage you to participate in whatever form you choose so that we make the difference that creates the environment in which our businesses can succeed.
I’d like to thank all Executive Committee members (Regional Chairmen and Elected Members) for the time they give to NAACAM’s affairs, and in particular Ken Manners, Ugo Frigerio, Gary Keen and Alex Holmes who chair our key Working Groups. I also recognise the role played by Roger Pitot who served as an advisor to NAACAM while it was without a full-time Executive Director over parts of 2015 and 2016 - his experience served us admirably in this respect. And of course NAACAM would not be the organisation it is without the dedicated support of Helena Marx, Bev Watts and Lynn Galbraith who deliver on the various services which keep NAACAM running.
Finally, I repeat our happiness and satisfaction with the 2016 appointment of a new Executive Director, Renai Moothilal. This appointment was a key deliverable for last year. I believe Renai will drive the delivery of a high quality value proposition for members and position the association and sector we serve on an upward trajectory. Some of that has already begun and I’m confident 2017 will see this taken further.
I wish all of you the very best in your endeavours this year.