Despite a challenging year of recovery from the devastating flood damage in eThekwini, the automotive industry remains a significant economic growth and employment driver for the City. The strength of this industry is critical for the local economy. Contributing R28 billion to the regional economy, it is promising to note that vehicle production is now picking up and recovering from the months of stagnation post the floods, confirming that the Durban Automotive Cluster’s (DAC) efforts to support the regional growth of the sector are bearing fruit.
According to Meghan King, Chief Facilitator for the DAC, the industry has faced significant challenges over the past year so this growth is encouraging.
“With the disruptions caused by the second year of COVID, the immense magnitude of the flood damage and significant supply chain issues, it has been a turbulent year,” says Meghan. “In times like these, organisations such as the DAC are vitally important, and through the consolidated efforts of industry as well as by pooling resources and knowledge, we have been able to overcome the challenges.”
Through various initiatives, the DAC continues to facilitate programmes that leverage the support of both the public and private sectors, generating positive outcomes for the local automotive sector. These initiatives have confirmed Cluster’s ability to pivot to industry needs, support firms with development programmes at scale and strengthen the relationship between the local industry and local government.
Meghan says that the DAC’s initiatives that have contributed to the growth of the local automotive industry over the past year include:
1. Growth Drivers
Due to recent challenges, there has been a need to identify new opportunities for growth in the sector. The Cluster conducted a detailed analysis of industry growth drivers, engaging with the province’s stakeholders and lead enterprises. The result is the roll-out of various value chain development programmes including the exciting GrowthFinder Diagnostic, a benchmarking methodology designed to support supplier growth opportunities.
2. Skills Development
To meet the changing needs of the industry, two new training programmes have been introduced, the Team Leader Development Programme (TLDP) and the Emerging Leaders Development Programme (ELDP), and the first group of learners completed these programmes in 2021. Customised for the manufacturing sector, these courses develop both the technical and soft skills of the learners. Currently, 80 emerging leaders are doing the ELDP and 90 team leaders are busy with their TLDP, the largest training group for the DAC in one year.
3. Talent Pipeline
To establish a skills pipeline of talent for the sector, the DAC has partnered with the United Nations Development Programme (UNDP) to deliver a technical skills development programme for new entrants to the automotive industry. This has proved very successful and 60 operators have been trained and are being absorbed by the industry into shop-floor positions.
4. Business Accelerator
In December 2021, we delivered our first Business Accelerator Programme, allowing us to incubate and upgrade five black-owned SMEs as potential suppliers to the sector. We are supporting them by providing market access and by facilitating affordable, structured financing. Two of these businesses have already engaged in commercial relationships with lead firms in the Cluster. Due to the success of the programme, we plan to repeat the Accelerator in 2022.
Meghan says the development of these projects has been made possible by the DAC’s ongoing partnership with the eThekwini Municipality. More recently, the Cluster also partnered with the KZN Department of Economic Development, Tourism and Environmental Affairs to accelerate the DAC’s localisation and black supplier development efforts.
Takalani Rathiyaya, who heads up the Economic Development Programmes Department at eThekwini Municipality, says the DAC’s role is more critical than ever. “Realising sector growth is critical to change the trajectory of economic development in eThekwini and South Africa. It’s up to initiatives such as the DAC, working together with government, to support industry and to seize opportunities.”
Meghan sums up: “For 20 years, the DAC has been the primary agent to support the automotive industry’s regional growth. The ongoing backing of the eThekwini Municipality and now the KZNEDTEA, combined with the support of our members, is key to enabling our primary objectives of employment growth and private sector investment, and ultimately to grow the manufacturing value-add of the local industry.”