You are here: Buzz ASCCI initiates revitalised approach to promoting localisation
Localisation is a critical tool for industrial development, and as the national co-ordinating body, Automotive Supply Chain Competitiveness Initiative (ASCCI) aims to advance its localisation agenda through activities which support successful localisation of components in the South African automotive sector. Against a backdrop of current low levels of local content, and the proposed ambitious targets outlined in the forthcoming South African Automotive Masterplan, a key priority for ASCCI is to deepen local manufacturing value addition through localisation, by developing opportunities for local sourcing of components at a Tier 1 and Tier 2 level.
In recent months, with the support of its key funding partners (The Department of Trade and Industry, NAACAM, NAAMSA and NUMSA), ASCCI has initiated a revitalised approach to promoting localisation. The first of these activities was the roll-out of a survey to OEMs and Tier 1 firms to identify opportunities and barriers to localisation. Key barriers to localisation which were explored through the survey included: timelines associated with the localisation opportunity; the availability of locally-sourced materials; associated shipping costs; and access to requisite technologies to facilitate the localisation opportunities. After consolidating the survey responses, three priority sub-sectors were selected for the first phase of implementation: metal pressing/forming; plastic moulding; and fabric/trim/foam. Although these opportunities do not provide a comprehensive view of all localisation opportunities in the automotive sector, they represent a set of tangible and actionable opportunities for Tier 1 firms.
Following this, Tier 1 firms in each of the priority sub-sectors were invited to present to ASCCI’s Localisation Sub-Committee on their three highest-value localisation opportunities. The Sub-Committee engaged with presentations from six Tier 1 firms, and developed a dashboard of prioritised localisation opportunities, which ASCCI will support over the next six months.
The second significant localisation activity undertaken was the development and launch of a Localisation Pipeline Tool. The Tool, developed in collaboration with key stakeholders, can be used to undertake an initial feasibility assessment of identified localisation opportunities, considering blockages to localisation and the extent to which they impact or prohibit the introduction of specific new local content. The Tool considers five key criteria: market opportunities; technology; shipping and sourcing; financial viability; and part price benchmark. Once all the relevant information has been uploaded, the Tool generates a colour-coded viability outcome. Should the opportunity found to be viable, it is recommended that a formal business case be undertaken to full assess the viability of the opportunity. The Tool also allows ASCCI to develop a strategic view of the viability of industry-wide localisation opportunities.
Arthur Mtombeni, Plastic Omnium’s Country Director for South Africa and ASCCI Localisation Sub-Committee Chair was keen to encourage the automotive sector to participate in ASCCI’s localisation activities. He said “Our key automotive competitors, Turkey, India, Thailand and Mercosur have fully grasped that to survive and grow a stable automotive sector it is imperative to have a strong stable and deep local supply base. In this light I urge each one of us to engage on localisation and get involved in existing and new initiatives to drive localisation.”