Approximately R1 billion rand will be invested in a new component supplier project to service Volkswagen of South Africa.
Several national and international component manufacturers are expected to establish operations in Uitenhage, with six new componet supplier factories already under construction.
Approximately R1 billion will be invested in the new facilities by mid 2009 and the project is expected to create 1 000 jobs.
Developed in response to the new Automotive Production and Development Programme (APDP), the plan is expected to assist VWSA in extending its manufacturing ability and assist the component industry in becoming globally competitive.
VWSA managing director David Powels said of the development, “We are determined to go the next step and take up the challenge presented by the new APDP to further extend our manufacturing capability and competitiveness.
"Our focus will be on cost, quality, technology, labour stability and people skills development. Labour stability and skills upliftment are two key enablers.
"The new APDP presents the opportunity to revolutionise the South African supplier component industry which has a long way to travel before it can claim global competitiveness," said Powels.
Long way to go
“In terms of cost competitiveness, there’s an approximate 20% gap to manufacturers in Western Europe.
"The gap widens to more than 30% when comparing South African automotive manufacturing cost structures to those in emerging automotive power houses such as India, China and Russia.”
“There is only one way in which the automotive manufacturing industry in South Africa will be able to survive in the medium to long term - by securing much higher levels of local content.”
“This includes the need to introduce new technologies and increase the use of local materials in the domestic component manufacturing industry,” he concluded.
More to follow
Five suppliers are already establishing manufacturing facilities in the Nelson Mandela Bay Logistics Park (NMBLP), adjacent to the automotive manufacturer’s Uitenhage factory.
The five suppliers are: interior plastic components manufacturer Faurecia Interior Systems; metal pressing parts manufacturer Bloxwich Industries; side mirrors and cables manufacturer Flextech; bumper systems manufacturer Rehau Polymer; and headliner and door panels manufacturer Grupo Antolin.
Although not specifically on-site at the NMBLP, manufacturers of metal stampings and welded assemblies, Bel-Essex Engineering, is constructing a new facility directly opposite the Volkswagen plant.