The South African automotive industry has experienced significant growth since its first inception in 1995. South Africa’s trade relations with other countries has facilitated the growth of this sector. Government introduced programmes that encouraged growth in the sector, namely the Motor Industry Development Programme (MIDP) and the Automotive Production and Development Programme (APDP). South Africa as the catalyst for development in Africa needs to continuously strive to integrate with other developed countries to and promote Foreign Direct Investments into the continent. The development of the industry requires organic growth to ensure that it remains sustainable. The research problem addressed in this study is to establish the role government plays in ensuring a sustained growth of Foreign Direct Investment (FDI) in the automotive sector. The establishment of this statement is imperative to the growth of automotive investments by multinationals in South Africa. Original Equipment Manufacturers (OEM) are positioned in three of the country’s eleven provinces. The Eastern Cape region has been known to be the automotive-hub of South Africa with a GDP that is driven by the secondary automotive sector consisting of multinational OEM giants such as Volkswagen South Africa (VWSA), General Motors South Africa (GMSA), Ford Motor Company, FAW and Daimler. South African OEMs are required to lobby at the principal companies before a new model can be built in the country. Lobbying involves offering competitive logistics costs to build models in South Africa. Stakeholders led by government are required to actively participate in these negotiations to sustain the industry in the country. One of the ways this can be achieved is through formulation, integration and alignment of strategies between all stakeholders. Stakeholders involve private sector and public sector working together. South Africa has achieved an open-country perception to foreign investors through the APDP. The problem statement was accurately explained and expressed clearly and sub-problems were identified from areas in the main problem that required further analysis. Literature has revealed that South African ports are considered to be the most expensive in the world and that there is a lack of port and rail integrated infrastructure. Providing a complete supply chain for logistics will result in increased FDI for South Africa. The governmental entities’ support will allow the OEMs an opportunity to increase investment in South Africa thus creating employment and adding value to the GDP of South Africa. The South African component manufacturer’s sector has grown intensively creating sustainable jobs for South Africans. The industry is structured in such a way that there is a multiplier-effect reaction to macro-economic conditions. A comprehensive literature review was executed to understand the nature and extent of the global automotive industry, the South African automotive industry, the regions that host OEMs, the Motor Industry Development Programme and the Automotive Production and Development Programme. A primary research instrument was constructed, in the form of a questionnaire, to test themes which were highlighted in the literature review which can influence the sector’s competitive advantage. A questionnaire was distributed with the assistance of industry representatives in the Transport and Logistics sector. There was consensus on many issues regarding the current structure of the South African automotive industry. Specifically, the importance of rail, efficiencies, prices and value-added services needed in the industry to attract FDIs as well as the readiness of the Port of Port Elizabeth with regards to being positioned as an automotive-hub for Sub-Saharan Africa.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:nmmu/vital:29260 |
| Date | January 2017 |
| Creators | Shogole, Nomkhitha Samantha |
| Publisher | Nelson Mandela Metropolitan University, Faculty of Faculty of Business and Economic Sciences |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Thesis, Masters, MBA |
| Format | xi, 102 leaves, pdf |
| Rights | Nelson Mandela Metropolitan University |
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