Page 25 - Provincial Treasury Estimates.pdf

Estimates of Provincial Revenue and Expenditure (EPRE) -2023/24 Financial Year
The sector also remains to be a major source of foreign direct investment for the country. Between 2018/19 – 2021/22,
Isuzu, Volkswagen, Mercedes Benz and Ford have secured investments worth of R1.2 billion,
R6 billion, R13 billion and R16 billion respectively for the country and which have mainly been located within the
province, creating approximately over 10 000 total employment opportunities.

In terms of performances the manufacturing sector’s strong recovery in 2021 was mainly driven by increased export
volumes for vehicles and transport equipment. By end of quarter 3 of 2022 manufacturing activity in the Province
rebounded after recording a contraction in the previous quarter. This was due to higher production levels for motor
vehicles, parts and accessories and other transport equipment.

By end of quarter 4 of 2022 formal manufacturing in the Province employed a total of 167 000 workers, representing

a net gain in employment for the sector of 52 000 jobs when compared to quarter 4 of 2021. Weaker global demand,
and load shedding are likely continue to be key determinants of output growth and investment decisions within the
sector over the near-term.

Moving forward, maintaining the sector’s global competiveness whilst ensuring meaningful localization will be critical.
Accordingly, the provincial government has fully embraced the South African Automotive Masterplan 2035 as key
policy guide on localisation, which has set targets of 20% local content on all vehicles produced domestically by 2035.

Targeted suppliers for support will mainly constitute Tier 2 - 4 black auto component suppliers who will be subjected
to technical training programmes in partnership with global auto manufacturing industry associations. The aim is to
benchmark and upscale their competitiveness to global standards (e.g. India and Thailand) so as to improve their
market access to global auto value chains.

Through AIDC the provincial government has also been following closely some of the new developments around

electric vehicles (EVs) especially within the EU environment, which remains to be the major market for SA produced
vehicles and transport equipment. The immediate concerns are to ensure that the local industry is adequately
supported to fully transition to the new manufacturing standards of EV’s in line with EU requirements that are expected
to be adopted by 2035. Towards achieving that goal the following will be prioritized over the coming medium-term:
x Developing Supplier Manufacturing Incentives for technology transfer and local adoption;
x Support investments on testing facilities and charging stations for EVs in the EC;

x Support Lithium Battery Manufacturing and Recycling capacity in the EC; and
x Reskilling and Upskilling Youth for Electric Vehicles Manufacturing.

Two other manufacturing subsectors with potential for growth in the province are agro processing and manufacturing

for renewables. Therefore, support to these subsectors will significantly be scaled up through direct financial and
locational support within the provincial Special Economic Zones (SEZs) and Industrial Parks working closely with the
private sector to attract additional investments.

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