ANALYSIS: Minister Parks Tau revs up a transformation and localisation drive for the automotive industry
It doesn’t seem like anyone told our trade minister that he lost a BBBEE sector code court battle last week – yes, it was on a technicality, but it still doesn’t explain the transformation energy Parks Tau brought to SA Auto Week in Durban.
Trade Minister Parks Tau emphasized transformation as a core component of South Africa's automotive industry competitiveness during the SA Auto Week conference in Durban. The minister challenged the notion that transformation and competitiveness are mutually exclusive, stating that an industry drawing from all its people and a broad supplier base is stronger.
Tau proposed growing supplier networks, focusing on electric vehicles (NEVs) and localisation as key strategies to build a more inclusive and competitive industry. He framed imported components as an opportunity for localisation, stressing that the R151-billion in imported components presents a significant growth opportunity.
The minister addressed the current reality, noting that local content stood at 38.1% against the 2035 target of 60%, and most OEMs and Tier 1 suppliers remain foreign-owned. He demanded outcome-driven action, urging commitments that can be measured and reported on.
Tau's transformation agenda relies on the Equity Equivalent Investment Programme (EEIP), which allows foreign OEMs to meet BBBEE ownership requirements through financial contributions toward localised industrial development and skills training. The minister also supported reforms to the Automotive Production and Development Programme Phase 2 (APDP2), which aims to reward manufacturing in South Africa and promote component manufacturers.
The Automotive Industry Transformation Fund (AITF), a collective EEIP mechanism, was introduced to unlock market access and coordinate Tier 2 and Tier 3 development across the sector. Despite progress in Tier 1 transformation, localisation at lower levels faces challenges related to scale, raw material costs, and global head office sourcing restrictions.
Written by urgent.news from Daily Maverick's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
