Nelson Mandela Bay is the powerhouse of South Africa’s automotive industry, the sector that drives the metro’s economy.
The numbers tell the story:
- 45% of local vehicle production and more than half of SA’s vehicle exports emanate from this metro, with over 100 000 vehicles being shipped annually through the Port of Port Elizabeth.
- We are home to the country’s largest auto manufacturer, Volkswagen Africa, accounting for 24% of South Africa’s vehicle production, and the largest private employer in the province.
- The Bay is also home to almost half of the country’s component manufacturers, many of them multi-national companies supplying not only the metro’s automotive plants, but also those in other provinces and global customers.
- Together, these businesses account for 41% of SA’s automotive industry employment, directly providing about 60 000 jobs in the Eastern Cape.
The strength of the automotive industry has a massive multiplier effect on the local economy, supporting employment (and consumer spending power) across diverse suppliers with knock-on impacts into the retail, hospitality, and services sectors.
The entrance of a new player, Stellantis, the world’s fourth-largest automaker by sales, which is constructing a R3 billion light commercial vehicle plant at Coega, is thus very welcome. The plant is anticipated to create around 1 000 direct jobs and is targeting local content of 30%, opening up new business opportunities for local suppliers and service providers.
The presence of global automotive players has also been the catalyst spurring the development of depth of high-level manufacturing skills, innovation, and technology development that ripples into other sectors, enabling a diversity of manufacturing operations in the Bay.
This puts Nelson Mandela Bay in a strong position, although it is not without challenges, especially now as the global automotive industry shifts away from internal combustion-powered vehicles to greener, new energy vehicles (NEVs).
Lack of policy certainty on local manufacturing of NEVs, lack of local demand for NEVs, and changes in the demands of their global export markets, are key challenges facing the local auto sector.
Locally, the sector also faces significant challenges in the enabling environment, particularly in the reliability of electricity supply, inefficient ports and the rail system, and safety and security challenges. This is why we have interventions such as an Electricity Technical Task Team in place to focus on tackling infrastructure shortcomings which lead to unplanned power outages. It is also why we are advocating for public-private partnerships around the North to South rail corridor to be prioritised.
Initiatives such as the Business Chamber’s Local Economy Reinvention Think Tank aim at enabling the continuance, sustainability, and strengthening of manufacturing in the Bay. With regard to the local auto sector, this is being run through an Altermotive workstream which is focused on a greener, technology-driven and diverse future, which will enable a reinvention of the local industry.
The automotive sector and the spin-offs it creates in skills, technology, and innovation are what provides the Bay with a competitive advantage and the opportunity to grow as a diversified manufacturing and export hub for Africa.
Denise van Huyssteen is the Chief Executive Officer of the Nelson Mandela Bay Business Chamber.
