The nation’s capital wants to attract more motoring capital with a special automotive zone.
Tshwane wants to become the old Detroit of Africa. As part of government’s urgent recognition that South Africa’s stalled economy requires a reboot, the new Tshwane Automotive Special Economic Zone (SEZ) has been launched.
President Cyril Ramaphosa, fresh from his victorious supporter visit to the Springboks in Japan, announced the new venture.
Although it is not located near a major port, Tshwane has become a powerful automotive assembly and supplier hub. BMW, Ford and Nissan all have substantial manufacturing facilities there and produce a great many more vehicles for exports, than they do for domestic delivery.
The government wishes to incubate this Tshwane automotive assembly momentum by creating a special zone. As such the Tshwane Automotive Special Economic Zone (SEZ) will see the first phase of its development in land adjacent to Ford’s Silverton facility, with the American company becoming a chief partner and beneficiary.
The initial project will see the development of an industrial supplier park, servicing the automotive industry, on 81 hectares of land. Projected employment growth with this first phase, is calculated to equal 6 700 new jobs.
Nine unnamed companies have committed to entering the Tshwane Automotive Special Economic Zone by January of 2021.
Broader development could see up to 70 000 possible new job opportunities, as the Tshwane Automotive Special Economic Zone is expanded to 161 hectares in future.
South African vehicle exports are surging. Last month South Africa built 41 277 vehicles for export. Some of the individual model numbers are enormous. Ford exported 8 133 Ranger bakkies in October and it will be the new development’s anchor tenant.
The more quality local suppliers Ford can find for its componentry, the less vehicle content it must import – maximising the profit opportunity on each Ranger exported. By having a space that is specially zoned by government for automotive industrial activity, Ford is expecting new suppliers to come online and existing contractors to possibly expand their capacity.
Geographic proximity is also key. The closer suppliers are to final assembly the less lag there is in the supply chain. It also lowers the overall risk of transport induced disruption.