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Threatened by extinction, SA’s motor sector is demanding action from the state

Threatened by extinction, SA’s motor sector is demanding action from the state
An electric VW ID. 3 car charges at a public charging station on 29 October 2021 in Berlin, Germany. (Photo: Carsten Koall / Getty Images)

The boss of one of our industry associations recently did something unusual: he spoke truth to power. This, as opposed to the kind of obsequiousness we’re used to seeing in cringeworthy corporate interactions with those who write the regulations that allow them to operate.

In fact, Mikel Mabasa, the chief executive of what used to be called Naamsa and is now called naamsa | The Automotive Business Council, let rip in the pages of Engineering News, accusing the government of moving at a “snail’s pace” and saying it “is currently not geared to adequately look after the interests of our industry”.

He went on, and it’s good stuff so let me hand the mic to Mabasa: “Mining and agriculture are served by large government departments – the Department of Mineral Resources and Energy and the Department of Agriculture, Forestry and Fisheries. Meanwhile, South Africa’s automotive ­sector, which generates around 18.7% of domestic manufacturing output, is managed by an automotive desk of about six people at the Department of Trade, Industry and Competition (DTIC).”

As they say on Twitter where’s the lie?

Mabasa’s broadside at Minister Ebrahim Patel’s disinterest in a sector of the economy that employs hundreds of thousands in its supply chains and integrated structures is more interesting for its timing than its content. Anybody who watches the industry can see as plain as daylight that Patel is not in the least bit interested in saving the South African motor industry.

One is left to hazard a guess at why he would risk up to 7% of GDP depending who you ask, so many livelihoods, huge foreign currency incomes, as well as big and reliable business for state-run ports.

Is the problem that the government has decided to take a different approach on which industries to back, or something more in line with the minister’s character, something petty, like the fact that BMW and Toyota are owned by foreigners?

Either way, Mabasa represents the seven automakers who build and assemble cars, trucks and buses here, and his blistering attack on the Department of Trade Barriers, Deindustrialisation and Petty Interventions represents a big shift in approach from an industry that has, for more than half a century, become very comfortable with its relationship with the government.

What it represents, frankly, is panic.

It will have given the industry limited comfort that the minister who has overseen the destruction of our railways, Fikile Mbalula, took time away from telling jokes on Twitter to respond to Mabasa’s enfilade fire.

Speaking on 4 July, as reported by Engineering News, Mbalula “confirmed that the Department of Transport has established an autonomous and EV [electric vehicle] working group to gather input from stakeholders in drafting legislation and regulations”.

While Mbalula was blathering on about working groups, and the DTIC’s Auto Green Paper quietly celebrated its 14th month in circulation, the EU council voted to confirm the demise of the internal combustion engine (ICE) after 2035. With the UK (2030), that’s the majority of our markets gone.

There was last-minute lobbying to include e-fuels into the deal as a result of infighting in the German coalition government.

This did happen, but not in a legally binding way and outside of the scope of the fleet standards. So, beware the spin on e-fuels; the deal is a political fig leaf for Christian Lindner, Germany’s finance minister, who wasn’t able to summon EU-wide support to block the internal combustion phase-out.

Given the increasingly shrill demands for action from the auto industry in SA and the dead end faced by internal combustion technology in our key markets, it’s pretty much impossible to see how this gets fixed.

The motor industry is hideously complicated, and the notion that if the DTIC will not provide regulatory support for a pivot to EV manufacturing, manufacturers will simply need to find new markets is easy to type and very hard to pull off.

For example, SA benefits from a free trade deal with the EU, which is the foundation of some of the local manufacturing businesses. If those manufacturers don’t export to the EU any more, then that’s it. It’s over. Klaar.

Not all local manufacturers are completely exposed to the ICE phase-out. Some have strong local markets and markets outside of the purlieu of the EU and the other phase-out geographies, but it’s increasingly hard not to feel rather bleak about the future of motor manufacturing in this country.

There is a great deal of discussion and government attention around the idea of a “just transition” in the energy space – the idea that we can wean ourselves off polluting coal in a manner that does not leave workers and the environment destitute. It’s a noble concept and, in pure carbon terms, shutting down Eskom’s coal operation is more urgent than converting taxis to electric power.

But in terms of justice, many more people are employed in far better conditions in motor manufacturing and its associated components and other downstream operations than in energy. You might think, therefore, they’d at least try to save it, even though at this point it’s probably too late.

As Mabasa pointed out, the DTIC’s capacity to disentangle one set of regulations and to implement new, relevant and workable structures in a fast-moving and complex industry simply isn’t there. If Patel wanted to fix this, he couldn’t.

Unless something dramatic happens in the coming year or so, another avoidable crisis is upon us and the future will sail on by. DM168

Alexander Parker is a journalist, author and consultant.

This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R25.

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Comments - Please in order to comment.

  • Johan Buys says:

    We have a large domestic automotive manufacture that manufactures for the global and local market. Virtually all the makes have said they are going all-electric over this decade. The local manufacturers HAVE to switch from making ICE cars or they will have no market as Mercedes for example will not be making ICE by 2030. The DTI should be working out how to help this process (and benefit from it) and slapping higher import duties on EV is not the way to go about this.

  • Rg Bolleurs says:

    The government is only good at destroying businesses as it did during the lockdowns and the recent riots. When it comes to building something, quite useless

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