APDP – Success Despite Difficult Global Economic Conditions

Major players in the South African automotive industry lauded the success of the Automotive Production and Development Programme (APDP), saying it had contributed to the resilience of the sector.

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Speaking at the 3rd Southern African Metals and Engineering Indaba in Sandton recently, Renai Moothilal of the National Association of Automotive Components and Allied Manufacturers said the APDP was a success despite difficult global economic conditions.

“The APDP stabilized production that could have gone significantly south if there was not that kind of support,” Moothilal said.

He said the programme was designed in 2007/08 when there was a view that automotive production in South Africa could grow to 1.2 million. “It did not turn out that way. We all understand what happened in the global economy,” he said, referring to the global economic crisis.

Renai Moothilal of the National Association of Automotive Components and Allied Manufacturers

Speaking during a session on the APDP at the two-day conference, National Association of Automobile Manufacturers of South Africa (Naamsa) Director Nico Vermeulen said the automotive industry had grown significantly since 2000. He said the industry represented one third of all manufacturing in South Africa. “The industry is heading for a million vehicles produced in this country, the bulk of which will be exported, within the next four to five years.

“The important point is, as the automotive production expands and as exports expand, the metal and engineering sector will benefit. As localization deepens, the metal and engineering industry will benefit,” Vermeulen said.

He said the automotive industry was fortunate that government had provided support and policy certainty, enabling multinational companies to make significant investments. He, however, highlighted the importance of labour stability for the industry to reach the one million units mark.

Nico Vermeulen Director of the National Association of Automobile Manufacturers of South Africa (Naamsa)

Vermeulen was also optimistic about prospects of exports to the rest of Africa. Most African countries were reeling from the effects of the low oil price and poor policy choices. “That will change. Africa will offer opportunities going forward,” he said.

Speakers on the first day of the conference included ANC Treasurer-General Dr Zweli Mkhize, Minister of Economic Development Ebrahim Patel, ANC Member of Parliament Dr Makhosi Khoza, independent director of companies Dr Mamphela Ramphele, Manufacturing, Engineering and Related Services Sector Education and Training Authority (merSETA) CEO Dr Raymond Patel, Manufacturing Circle CEO Philippa Rodseth and Aurik Business Accelerator CEO Pavlo Phitidis.

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