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afrol.com / AENS, 14 December - African countries attempting to challenge South Africa's US$ 20 billion per year motor manufacturing industry are committing economic suicide, renowned industry expert Roger Pitot warned this week. Pitot told a Reuters Foundation media briefing in Grahamstown that South Africa's technical dominance in the sector was unassailable and attempts by other sub-Saharan African countries to establish competing motor industries were doomed to failure. "No other sub-Saharan African country, with the possible exception of Nigeria, has the capacity or domestic market to build a sustainable motor industry or challenge South Africa's dominance," said Pitot, who is managing director for International Strategic Investments Limited. South Africa's motor industry currently employs roughly 250 000 workers, generates annual revenues of US$ 20 billion and produces 316 000 units per year, accounting for 5,4 percent of the country's gross domestic product. "Many poor countries would like to have a national airline and a motor industry, [but] my advice is that they should not try to venture into the motor industry just for the sake of it. The end result is always failure," said Pitot. South Africa's motor industry, he said, had been developed over decades, based on a series of five-year master plans, hi-tech manufacturing plants, and a lucrative international export market. Poorly planned attempts to emulated South Africa's success in Zimbabwe and Botswana ended in economic disaster, Pitot added. - Only South Africa and Nigeria have the populations and [technical] capacity to sustain vibrant motor industries ... but even Nigeria has been forced to close two of its four motor plants [and] the industry is on the verge of collapse because of loose legislation on used [second hand] vehicles, Pitot said. - There is no way the motor industry can flourish if the influx of used cars is not curbed. It is illegal to import second hand vehicles into South Africa. This is one way of protecting the industry -- and its growth from strength to strength. Pitot warned that Nigeria urgently needed to institute import restrictions or it would face the same fate as New Zealand, where the import of cheap Japanese cars killed the local motor industry. While Nigeria's motor industry was in crisis, Pitot said South Africa's looked forward to increased profits because of its adoption of a single, coherent strategy in the Motor Industry Development Programme (MIDP) to deal with the pressures of globalisation and regional competition. MIDP aims to "establish a viable competitive industry locally and internationally, capable of achieving continuous growth and sustainable job creation. ... South Africa's motor industry has a good future - despite pressure [caused] by globalisation. The industry will continue growing by exporting vehicles and vehicle components both to African countries and overseas," he said. Pitot noted that South Africa was ranked the 20th largest automotive manufacturer in the world and exported significant numbers of cars to highly industrialised markets such as Germany, Japan and the United States. African countries, however, have inexplicably shied away from importing South African cars in the mistaken belief, Pitot said, that local products were inferior to those produced in the West. The rest of Africa "could thrive on imports of used [second hand] cars from richer countries. There is nothing wrong with this more sustainable approach," he said. - Many countries mistakenly think vehicles made [in South Africa] are of cheaper quality, not realising that they are doing particularly well on the international market, he said. Pitot said the merger of large multi-national motor companies and other globalisation trends were impacting significantly on component suppliers, but stressed South Africa's commitment to retooling and new investment in the industry had guaranteed continued growth. Investment in the South Africa motor industry had, he said, climbed from US$ 140 million in 1995 to over US$ 416 million in 1999. The National Association of Automobile Manufactures of South Africa (NAAMSA) concurs, reporting that "new vehicle exports, in the medium term are expected to continue to show strong growth. NAAMSA points to a 15 percent increase in new vehicle sales in 2000 and predicts additional aggregate sales growth of between 7,5 and 10 percent in 2001.
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