South African Business 2022

OVERVIEW Automotive

OVERVIEW Automotive Total manufacture and exports rebounded well in 2021. Volkswagen Polos have been made in the Eastern Cape town of Kariega (formerly Uitenhage) since 2017. In June 2021, as the company’s production of Polos in the year ticked past 61 000 (and Polo Vivos exceeded 10 000) the total production of the popular car reached the milestone of 400 000 units. More than 300 000 of those were exported, materially improving South Africa’s balance of payments. The National Association of Automobile Manufacturers of South Africa (Naamsa) has announced a name change to accommodate the fact that its mandate has expanded to represent the interests not only of original equipment manufacturers (OEMs) but retail OEMs and heavy commercial OEMs. It is now known as Naamsa | The Automotive Business Council. The organisation published figures in 2021 to show that automotive manufacturing and exports recovered well from the dip caused by Covid-19. Exported vehicles in the year to October 2021 amounted to 245 820, an increase of 12% over the previous period and total manufacture reached a figure of 371 180 by September 2021, an increase of 22%. Vehicle sales had declined sharply in the Covid-19 lockdown period. For the year to September 2020, sales of passenger vehicles went down by 34.4% and by a similar amount in light commercial vehicles. The manufacturing part of the automotive and components sector is a vital part of South Africa’s manufacturing landscape. It is responsible for more than 112 000 jobs which translates to more than 450 000 jobs through the multiplier effect. Long-term state support of the industry through the Automotive Production and Development Programme (APDP) is a major reason for the continuing health of this vital sector. The industry itself is looking to Africa for new markets. By increasing total production numbers to one-million vehicles, the sector will become more viable. South Africa has three centres of automotive production: the Eastern Cape, Gauteng and KwaZulu-Natal. In the Eastern Cape, the OEMs are Volkswagen, Mercedes-Benz, Isuzu and Beijing Automobile ONLINE RESOURCES Automotive Industry Development Centre: www.aidc.co.za National Association of Automotive Component and Allied Manufacturers: www.naacam.co.za Naamsa | The Automotive Business Council: www.naamsa.co.za SECTOR INSIGHT The Kariega plant of Volkswagen has produced its 400 000th Polo. Investment Corporation (BAIC). Ford has an engine plant in Port Elizabeth. In KwaZulu-Natal Toyota has a large plant just south of Durban. Although the manufacturers of loaders, dump trucks and haulers are not counted in the tally of South African OEMs, Bell Equipment, a global leader in its field, runs a large manufacturing site in Richards Bay. Pretoria is home to BMW, Nissan and Ford. The Tshwane Automotive Special Economic Zone (TASEZ) is a project of the Gauteng Province, the Department of Trade, Industry and Competition (dtic) and the City of Tshwane. The implementing agent is the Coega Development Corporation (CDC), the developer and operator of the Coega SEZ. Both the Nissan and BMW plants are expanding and Ford is investing in Silverton. There is an Incubation Centre for SMMEs at Nissan’s assembly plant in Rosslyn which is run by the Automotive Industry Development Centre (AIDC), a subsidiary of the Gauteng Growth and Development Agency (GGDA). ■ SOUTH AFRICAN BUSINESS 2022 72

OVERVIEW ICT Covid-19 has increased demand for faster data speeds. SECTOR INSIGHT Johannesburg will host Oracle’s first African data centre. Invicta Holdings, an investment holdings and management company, has expanded into the fibre field at a time when working from home has massively increased the demand for data. In 2021 Invicta acquired Dartcom Group for R500-million, giving it a presence in the distribution of communication and renewable technologies and the manufacture of fibre optic cables (under licence from Japan). As South Africa joins the global trend towards online shopping and with the first networks rolling out 5G in 2020, data centres are going up all over the country. The latest to join the trend is software company Oracle which announced in 2021 that Johannesburg would be the headquarters of its African cloud region. All of the company’s cloud regions worldwide will be 100% powered by renewable energy by 2025. Teraco stores data in Johannesburg, Durban and Cape Town. A second 30MW site is under construction in Brackenfell to complement the existing facility in Rondebosch. Microsoft Azure has facilities in Cape Town and Johannesburg and Amazon has two sites in Cape Town. Huawei Cloud services will use a partner company in Johannesburg to store its data. Africa Data Centre (ADC), part of the Liquid Telecom Group, has purchased a Tier IV data centre in Johannesburg, previously used by Standard Bank. A 2019 study by Microsoft found that the cloud ecosystem will create around 112 000 new jobs in South Africa by 2022 (IT Web). The number of permanent employees of Amazon Web Services reached 7 000 in October 2020. A new entrant to the South African market relies entirely on the cloud. Uniconta, an enterprise resource planning (ERP) system for small and medium-sized businesses, opened its first ONLINE RESOURCES Business Process Enabling SA: www.bpesa.org.za Independent Communications Authority: www.icasa.org.za Technology Innovation Agency: www.tia.org.za offices in Cape Town in 2019, a precursor to plans to expand elsewhere in Africa. Cell C became South Africa’s third mobile operator in 2001, following MTN and Vodacom. Cell C was in the news early in 2020 when it defaulted on interest payments on a loan and this had an effect on the shares of Blue Label Telecoms, which owns 45% of the operator. When Cell C’s results were announced in October 2020, reference was made to a turnaround strategy. The Council for Scientific and Industrial Research (CSIR) in Pretoria will host a new body aimed at preparing South Africa for the Fourth Industrial Revolution (4IR), the South African Affiliate Centre of the World Economic Forum. The Information Technology Association (ITA) is the trade and employer body of the Information Technology industry in South Africa. The ITA represents more than 200 companies which supply information technology equipment, systems, software and services. Members include IBM, Microsoft SA, Siemens, SAP and Axiz. ■ 73 SOUTH AFRICAN BUSINESS 2022