26 January 2007

By Nozipho Dlamini

The eThekwini Metropolitan Council and the Durban Automotive Cluster (DAC) are to inject R7- million over the next three years into the provincial automotive industry.

The two partners have agreed to contribute equally to improving the competitiveness of the regional automotive sector. Recently, they signed a Memorandum of Understanding (MOU) to seal their commitment.

According to the eThekwini city manager Michael Sutcliffe, the MOU is an extension of an existing partnership that they have had with the industry's role players.

"So far, the partnership has proved very successful in improving the industry, and we look forward to another three-year partnership with the cluster," Sutcliffe said. "eThekwini Metropolitan values this partnership as there are very few cities in the world that enjoy this sort of partnership with the private sector."

He said the automotive industry contributed significantly to the region and this joint venture proved their commitment to growing the industry and the economy as a whole.

Chairperson of the DAC Wolfgang Ropertz noted that the partnership addressed both the key local economic challenges and promoted broad-based black economic empowerment.

He added that the key industry challenges could be largely grouped in six areas:

• Macroeconomic trends
• Advancing competitiveness requirements
• Onerous compliance requirements
• Increasing importance of managing operational risk
• Transformation and developing skills to world class levels

He said through its five core programmes that included supplier competitiveness, logistics coordination and human resources development, the cluster had been able to out-perform the rest of the country.

The growth and competitiveness progress of the regional industry has been remarkable over the past few years.

Real revenue growth among component manufacturers in the province is estimated at 36% from 2002 to 2006, which is higher than the growth of 4% and 16% recorded for the Eastern Cape and Gauteng regions respectively.

Employment growth has also been positive, with local firms increasing employment by an estimated 34% versus 26% in the Eastern Cape and 15% in Gauteng.

Additional priorities for DAC until 2009 will be to bolster the transformation programme, supervisory training, procurement forum, joint auditing and procurement and the facilitation of HIV/Aids workplace programmes.

In addition, Ropertz concluded that DAC's proven track record over the last five years and its expanded focus to 2009 should provide further impetus to the development of the automotive industry in the eThekwini Municipality and the province.

"This will ensure that the region's automotive sector continues to report economic growth ahead of the average growth in South Africa," he said. -

Source: BuaNews