Tuesday, 14 April 2020

COVID-19: The South African auto industry

  • Year: 2020
  • Author(s): Prof Justin Barnes (B&M Analysts, TWIMS, Gordon Institute of Business Science)

This policy brief aims to support the South African Presidency and Department of Trade, Industry and Competition (the dtic) in their deliberations on the impact of the COVID-19 pandemic on the South African automotive industry. It has been compiled from secondary readings, the author’s own industry knowledge, two CEO interviews (one OEM and one component manufacturer), and five written submissions from firms/industry stakeholders, which were submitted in lieu of interviews. The findings presented are consequently exploratory, although the consistency of responses from across the interviews and written submissions suggests a broad and generic set of impacts and associated consequences for the South African automotive industry.

The answers to four key questions were solicited from the interviews, written submissions and secondary readings. This policy brief follows the structure of these four questions, first exploring the manner in which the industry has been affected by the COVID-19 lockdown; then looking at industry plans for reopening, given identified challenges in domestic and export markets; followed by industry perceptions of the potential for recovery; an exploration of critical issues for potential government support for the industry during the recovery phase; and conclusions.

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