SEIFSA welcomes automotive sector’s commitment to increase sourcing of locally-produced goods
Johannesburg, 28 June 2017 – The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) welcomes the automotive industry’s commitment to increase its sourcing of locally-produced goods.
SEIFSA Senior Economist Tafadzwa Chibanguza said the announcement made by representatives of the National Association of Automobile Manufacturers of South Africa in Sandton this (Wednesday) afternoon that Original Equipment Manufacturers (OEMs) would increase their sourcing of locally-produced goods as part of their 2035 Transformation Plan boded well for the metals and engineering sector, which was a supplier to auto manufacturers. The announcement was made after a meeting with the ANC leadership, which was also part of that press conference.
Mr Chibanguza said that the announcement speaks directly to the metals and engineering sector, which SEIFSA represents. He said the automotive sector makes up 31% of the total demand profile of the metals and engineering sector.
“It is, in fact, the largest domestic demand source for metals and engineering products, followed by construction and then mining. Prospects to increase local sourcing of inputs translates favourably to the metals and engineering sector since it indicates a potential growing share of activity for local companies.
“This is a classic case of a dynamic and pragmatic approach to a difficult economic environment,” Mr Chibanguza said.
He said that current levels of economic activity are very weak and only economic growth would counter that situation, but that would not happen overnight. The announcement by the automotive sector was a welcome, dynamic response to that weak environment.
Mr Chibanguza expressed the hope that the current impasse in the mining sector occasioned by the new Mining Charter would be resolved speedily in order to improve demand levels from that sector to the metals and engineering sector.
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