www.wcac.co.za

Key developments and Vision for the

sector in the Western Cape auto

hub

WC Automotive Component Manufacturers contribution to Industry

• Representing 11% of total employment • 10% of gross value add• 15 Automotive component manufactures• (Source: Quantec)

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WCAC Background• 2013 Western Cape Auto motive companies acknowledged, without

collaboration the local industry would not be sustainable long-term• Pro actively, 6 firms funded the formation of an Automotive cluster

in an effort to tackle the various challenges of industry• Western Cape government welcomed this move to foster local

economic growth and has since provided co-funding for the cluster

Membership

www.wcac.co.za

www.wcac.co.za

VisionTo promote the sustainable growth and competitiveness of the

Western Cape automotive manufacturing sector

MissionTo promote the Western Cape automotive sector’s unique value proposition through establishing mutual competitive advantages

ObjectiveIncrease supplier MVA in support of increasing employment,

enabling local supply chain capabilities, increasing local content & advancing transformation

Strategic Priorities

Access to scale & technology Competitive skills

Competitive operating

efficienciesCompetitive

supply chains

Supply chain competitiveness, enabling increased MVA, localisation &

employment

Transformation(cross-cutting)

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Institutional Structure

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1. C. Rautenbach, Atlantis Foundries (Chair)2. S. Ledgerwood, Precision Press (Vice-Chair)3. T. Mancini, Senior Flexonics 4. T. Du Toit, Qtec Moulding5. A. Turner, Torre Automotive6. S. Rosenstein, CGI7. N. Gwynne Evans, WCPG8. M. Van Wyk, WCPG9. D. Comrie, B&M Analysts10. M. Arde, B&M Analysts

WC NAACAM Chair: Andrew Turner, Torre Automotive

Executive Committee

Skills Development

Operational Capability

Infrastructure & Materials

Market Access

Highlights since kick off Nov 2013

• Institutionalisation of WCAC with governance structures• Development of formal Executive Committee comprising key

members, stakeholders and government• Development of strategy for WCAC and interventions in line

with this• Roll out of Graduate Development Programme for engineers

for all members• Regional Best Practice Study tours for industry• Initiated WCM programme at five of six member firms• Alignment with IPAP, NAACAM, WCPG, ASCCI

So what next? Build on successes to date• Explore further potential

– Deepen localisation, grow exports and Aftermarket

• Thus far, foundation has been laid – great deal of progress in short amount of time

• Next step: reflect on achievements, identify any gaps • Take action accordingly to build on success

Thank you and Good Buy

Further Background

Increased scale of production

1.Geographically distant from domestic OEMs therefore reducing appeal as source of supply

2.Sub-optimal levels of benefit derived from APDP & other industry incentives

3.Industry not prioritised in provincial and local Government policy and strategy

4.Capital investment age profile and automation levels

5.Diversification of customer base identified as a key risk mitigation priority.

3. Outcomes required1.Optimize benefit from APDP & capital investment incentives2.Enhance links to localisation focus of domestic OEMs3.Economic development strategy supportive of industry4.Increased exports of components at Tier 1 & Tier 2 level to African, EU & USA markets

1. Objective - long term

2. Associated challenges

Market & Technology Access

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Skills Development

• Greater productivity:– Parity versus leading cost countries

1.Lack of competitiveness relative to high income – high skill countries as well as low income-low skill countries

2.Limited availability of specialised skills as well as (less acutely) non-scarce automotive skills

3.Lack of labour flexibility inhibits competitiveness of industry/capital investment3. Outcomes required

1.Increased availability of management skills and ability of management to drive productivity enhancements

2.Increased availability of industrial engineering skills3.Elevated performance of team leaders and operators4.Enhanced labour market flexibility

1. Objective - long term

2. Associated challenges

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Operational Capabilities

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1.Business management systems not uniformly in place or not optimally effective

2.WCM manufacturing practices not in place or not optimally effective

3.Sustainability of WCM interventions highly variable

3. Outcomes required

1.Objective identification of firm-level requirements2.Support adoption and development of base business management systems3.Support adoption of ECM best practices on a sustainable basis 4.Facilitate inter-company learning

2. Associated challenges

• Supplier productivity:– Parity versus leading cost countries

1. Objective - long term

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Supply Chain Management

• Supply chain costs:– Reduced inbound SCM costs– Reduced outbound SCM costs

1.Geographically distant from major domestic OEM & AM markets, reducing cost competitiveness & attractiveness as a source of supply

2.Geographically distant from major domestic sources of raw materials

3.Long international supplier lead times reduce value chain flexibility & therefore negatively affect competitiveness

3. Outcomes required1.Reduced real cost and perceived lead time of supply to major domestic markets2.Reduced real cost and lead time of supply from major domestic hubs3.Reduced logistical cost and/or lead time of imported materials4.Reduced reliance on imported raw materials

1. Objective - long term

2. Associated challenges

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