The factors affecting the sustainability of the automotive component industry in South Africa.
The Automotive Industry in South Africa has undergone a major transformation process over the years and has evolved into a much sheltered and government supported industry. The recent wave of globalisation and liberalisation has brought about new challenges and opportunities which have forced companies to become more reactive to variation by intermittent, precipitous and cost-effective innovation through integrating the strengths of the local firm, such as creativity, flexibility and adaptability, with the innovation, technological capacities and overall market power and resources of internationally linked organisation. Due to the dynamic nature of the automotive industry, it was vital that South African organisations and management combine these factors to ensure a sustainable competitive industry, capable of competing on the worldwide platform. This study is intended as an investigation into the challenges experienced by South African automotive component manufacturers with regards to growth and survival. To this end, the literature review was conducted to identify the challenges impacting the industry. Empirical research was then conducted through the distribution of a web based research questionnaire to each member of National Association of Automotive Component and Allied Manufacturer (NAACAM). This quantitative study analysed data collected through interviews from 114 companies in the database of firms. The results support the literature review and demonstrate that changes in the industry have certainly impacted the business relationships of the local firm which resulted in companies grasping on to an unsettled future in the local industry. From these findings, recommendations were made to assist in strengthening the industry’s competitiveness. Whilst participation in global value chains has given the industry hope, other factors seems to weigh heavily on the progress of the industry. These factors are explored further.