The impact of the Motor Industry Development Programme on the competitiveness of automotive component manufacturers

Abstract

South Africa is now well and truly part of the global economy after emerging from an inwardly looking era a mere 14 years ago. The change was felt by all South Africans, and most certainly also by local companies who entered the global market with their goods or services. This study investigates the way in which the South African automotive component manufacturing industry has entered the global market and adjusted to become globally competitive. This study is done in light of the presence of the Motor Industry Development Programme (MIDP), a sector-specific industrial policy that aims at making the South African automotive industry more competitive by enabling them to export. The study has shown that the MIDP is succesful in making component manufacturers more competitive, but that its methods for doing so are varied and in some cases not direct or perhaps even intentional. The study has also illuminated the role that original equipment manufacturers (OEMs) play in enabling the MIDP to affect component manufacturers and in enabling the component manufacturers to sell its products profitably in the global marketplace.