The South African automotive industry, which generates around 18,7% of domestic manufacturing output, plays a significant role in our country’s economy, with a GDP contribution comparable to that of mining and agriculture. The 2022 Automotive Export Manual released by the Automotive Industry Export Council earlier this year also revealed that vehicle and automotive component exports increased by 18,1% in 2021 to comprise 12,5% of total South African exports.
Unfortunately, the industry has been hit hard by recent global and local events, including global supply chain disruptions and operational efficiencies at South African ports that are well below international standards, further exacerbated by riots and cyberattacks. More recently the flooding in automotive-intensive KwaZuluNatal and onerous load-shedding schedules resulted in the manufacturing production figures released for April 2022 showing a substantial decline of 7,8% year on year.
With most of these setbacks hopefully behind us, and efforts being made to stabilise electricity supply and improve the situation at our ports, savvy automotive manufacturing firms should consider the five trends that Deloitte’s 2022 manufacturing industry outlook pinpointed to watch. With business agility critical for organisations to operate through unprecedented turbulence, the report identifies key strategies to drive competitiveness. These include embracing technology to create more connected, reliable, efficient and predictive processes; carefully reviewing cyberdefences and resilience in the event of cyberattacks; and closely monitoring the fast-evolving environmental, social and governance (ESG) landscape and adjusting operations accordingly. Proactive approaches to these challenges will help automotive manufacturers mitigate setbacks while creating a competitive advantage.
Nedbank’s deep understanding of the manufacturing industry has enabled us to develop tailor-made solutions in this field, making us the expert strategic banking partner to grow our clients’ businesses. The bedrock of our manufacturing portfolio is the deep, lasting and value-adding relationships we develop with our clients and key industry stakeholders. These solutions are underpinned by our continuous drive to innovate our financial and administrative functions, enabling you to take your business to the next level.
Through this profound insight we provide bespoke, innovative financial solutions to help grow our clients’ businesses and strengthen their competitiveness in the market. For example, because we know that present macroeconomic challenges coupled with power supply issues lead to having cash flow constraints that could prohibit delivery and growth, we have a range of solutions to mitigate that risk. Similarly, as the green bank, we offer a comprehensive range of solutions to promote the sustainability of clients’ businesses, giving them the the competitive advantage that is so vital in the market.
Our vast experience in global trade enables quicker, more efficient cross-border transactions when importing and exporting, and easy access to funds smooths out cash flow fluctuations between production cycles, enabling clients to take advantage of discounts and bulk offers.
But the real value we offer is our partnership approach, which means clients benefit from a committed partner with industry experts who will advise on growth, investment and financial strategies based on our deep insight into each client’s unique financial situation.
For more information about our specialist manufacturing services, e-mail us at manufacturing@nedbank.co.za.
