Presented at the UNIDO-SPX Rhythm meeting on 29 September.

1. UNIDO Rhythm Meeting Lance Schultz 29 September 2011

2. Index Feedback on benchmarks Current Local Content Levels in SA Automotive Industry Strategic Challenges in SA Local Content Challenges in Expanding and Deepening Local Content A strategic model for competiveness Competiveness in the SA Automotive Industry

3. Current Status NAACAM UNIDO benchmarking has resulted in 8 benchmarks including 2 benchmarks in WC region. The balance of the 2 for the EC region should be completed, October 2011, which will make the target of 10. The GP benchmarks (10)-outsourced to H.Viljoen, and is still WIP. An opportunity remains to do at least 4 benchmarks in the KZN area, which is being pursued by the EC . On average, it takes 3 months from the time the first contact is made until the benchmark is complete at a company. Many NAACAM members have been reluctant or disinterested in participating, largely citing lack of time to participate.

4. Way Forward Should the program be extended - include non NAACAM members as well? At the moment, the NAACAM pool of opportunity is exhausted and not much more members to market toward, hence the above suggestion. Perhaps - like Agri? If the AIDC EC is contracted to do another 10 - 15 benchmarks, would strongly suggest that other industries in the EC be considered. At least in this way, we can achieve the desired targets. Alternatively, NAACAM provides list indicating who is willing to participate - this being based on some intervention on their part where they nominate their members who want a benchmark.

6. Paint

7. Bumpers

9. Starter motors

10. Alternators

11. Wiper systems

13. Seats

14. Door panels

16. Bootlids

17. Sideframes

18. Doors

19. Axles

20. Differentials

21. Drive shafts

22. Brakes6% Chassis and Drive-train Source: Toyota SA: Dr J.van Zyl 33% 14%

23. Have to potentially have a SA Car to increase sustainability AFRICAR

25. Volumes / economies of scale

26. Frequently changing technology

27. Distance from design centres

29. Local steel specifications

30. Investment costs

32. Local steel specificationsChassis and Drive-train

34. Supplier competitiveness

35. Economies of scale

36. Small, independent suppliers - risky

38. Global quality standards

39. Lean manufacturing

40. Lack of technical skills

42. Exchange Rate Regime

43. Import parity Pricing

44. Socio-economic

46. Quality Standards

47. Internal Processes

48. Cost

49. Leadership & Change Management

50. Adherence to international standards

51. Labour Skills

52. EquipmentThere are many factors that could directly or indirectly affect the competitiveness of sector. The question is which factors contribute the most to competitiveness within the internal environment of manufacturers. This is the space with which various initiatives could impact. (UnidoTirisano Programme SWOT analysis 2010, Crafting and executing strategy, Johan Hough, 2010)

53. THE END Questions?