ISUZU Motors South Africa has invested R580m to support component localisation. This investment includes provision of the supplier tooling needed to manufacture specific components in preparation for the recently launched all-new 7th generation ISUZU D-MAX bakkie.
This has been a four-year journey for ISUZU and one they have travelled together with their local suppliers, as they embarked on a new sourcing strategy at the beginning of 2018. The process included classifying local suppliers that had the technical capability to manufacture a list of ISUZU components required for the new D-MAX bakkie.
Localisation is the process where an increased percentage of the parts and costs of a motor vehicle is either assembled or manufactured in South Africa rather than imported. This process represents a significant opportunity to transform the automotive sector and usher in the entry of Broad-Based Black Economic Empowerment (B-BBEE) participants in its supply chain. ISUZU has maintained an automotive industry-leading B-BBEE Level One for a second consecutive year.
Aligned to the South African Automotive Masterplan’s (SAAM) set target and aspiration of ensuring local value addition of 60% by 2035, ISUZU has driven localisation as a key strategic imperative for the business. Billy Tom, ISUZU Motors South Africa President and CEO says, “Localisation is essential in transforming the automotive sector. SAAM 2035 could see the automotive industry growing from 600,000 to 1.4 million vehicles a year in production. This presents a huge opportunity for us to support black-owned automotive suppliers in building their businesses in the industry. It will help drive transformation and create jobs.”
“With the relevant commodities intellectual property rights secured we’ve collaborated with our local supply partners to develop the necessary capabilities to sustainably manufacture those commodities in South Africa,” says Komane Pitso, ISUZU Motors South Africa Senior Vice President Commercial Operations.
Consequent to the R580m investment, suppliers now have the necessary machinery and equipment required to manufacture the components needed by ISUZU. Through this process ISUZU has had the opportunity to work with 107 local component manufacturers, maintaining a local value add content footprint and creating at least 235 new job opportunities at local component manufacturers.
One such example of our localisation strategy is the partnership between ISUZU Motors South Africa and 73% black-owned supplier Acoustics, based in Gqeberha. They were awarded with both the sound and carpet assembly contracts specifically for the new D-MAX bakkie. Responsible for the manufacturing of smaller boot liners, Acoustics have assisted ISUZU in achieving an industry first through the installation of local vinyl mats.
“We have to do things differently if we are to draw on local content, and Acoustics is an example of drawing on local content and capabilities. Over the last few decades design capability has transitioned to being more multinational, so we have to get involved locally,” says Pitso.
“Great strides have been made in the alliance between the automotive industry and government, and the progressive automotive policies in the country are testament to the strength of the pro-government/industry collaboration. But this isn’t enough, the automotive industry still faces tough challenges in accelerating localisation and developing a future-proof supply chain, and without localisation the automotive industry will struggle to remain competitive.” concludes Pitso.