Abstract

NAUDE, MJ  and  BADENHORST-WEISS, JA. Factors inhibiting the South African automotive industry from fully contributing to local economic development. JCMAN [online]. 2012, vol.9, n.1, pp.48-65. ISSN 1815-7440.

This article reports on the findings of research that investigates supply chain factors that hinder the South African automotive industry from fully contributing to local economic development. In order to identify these factors, a literature review and empirical research were undertaken. The literature study includes an overview of local economic development and supply chain management. This is followed by a report on an empirical study consisting of two phases in the form of semi-structured interviews with participants at leading automotive assembly plants and an opinion survey done among automotive component manufacturers. The interviews revealed that automotive assembly plants have to import too many parts as there is a lack of local suppliers in the markets. This situation is exacerbated by the fact that existing local suppliers are scattered across the country. The opinion survey revealed that the financial stability of suppliers, the high cost and inefficiencies of South African ports and the availability of skills are factors that prevent the South African automotive industry from fully contributing to local economic development. These factors are mainly caused by rapid developments in supply chain management, technological advancements, globalisation, intensified competition and the recent global economic recession. If handled correctly, these factors present opportunities for local economic development.

Keywords : automotive industry; local economic development; supply chain management.

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