South African Auto Components Body For Production Sharing

New Delhi, January 22: | Updated: Jan 23 2003, 05:30am hrs
In the light of global economic downturns, South Africa and India can garner major commercial and technological competitiveness if they undertake to share production of automotive components.

Speaking to FE, the South African National Association of Automotive Components and Allied Manufacturers Association (Naacam) executive-director Clive Williams said South Africa, as an emerging market, has been able to attract Mercedes Benz and BMW to invest in manufacturing. I think India can learn a great deal from our country.

Forging Alliances

Supply-chain partnerships, technology sharing, cooperation in technological development, tool sourcing and cooperative marketing are among the most under-exploited areas
India and South Africa were set to be reciprocal distribution centres.
Both the countries are emerging markets and are hugely cost-competitive
Optimistic about sales, considering its a massive and growing automotive industry
Strong Frontier has received offers of domestic representation from firms in Nashik and Delhi

Mr Williams was here to attend the AutoMechanika 2003 automotive component fair.

Speaking about opportunities that have arisen for the two countries at the present time, Mr Williams said supply-chain partnerships, technology sharing, cooperation in technological development, tool sourcing and cooperative marketing were among the most under-exploited areas of opportunity. He also emphasised that India and South Africa were set to be reciprocal distribution centres.

South Africa has a finetuned distribution base to service the southern hemisphere. India has an advantageous geographic location to service the rest of Asia and Australasia. It is a win-win situation if the two countries decide to enter into multi-faceted business alliances.

Mr Williams revealed that heavy commercial vehicles (HCV) components was an area that was underdeveloped in South Africa and was a huge commercial opportunity for Indian firms. Indicating that segment was a low volume but high margin one, Mr Williams said that the Indian firms entering the segment would not face much competition.

When asked about the advantages of starting operations in South Africa, Mr Williams said, We have a huge raw material availability, first world infrastructure, low power, land and development costs, low cost tooling, development based on regional cooperation.

Both the countries are emerging markets and are hugely cost-competitive, he said. We could forge partnerships and take on larger western automotive giants, said Mr Williams, it has been done before, and the potential of these two countries insists that it can be done again.

He said that the logical conclusion to any business deals between the two countries could be in mergers, acquisitions or joint ventures which would strengthen the countries, both individually, and with respect to their relations.

Mr Williams revealed that Toyota Motors of Japan would setting up a new automobile plant in South Africa in the next four years. He indicated this could be a major opportunity for Indian automotive component manufacturers to bag component manufacture contracts with the automobile giant.