South African-owned companies are more represented within the second- and third-tier supplier bases that supply the sub-parts built into completed components. Transformation goes hand in hand with localisation. In this regard, the launch of a R6-billion Automotive Industry Transformation Fund (AITF) to support Black participation in the automotive industry supply chain will be imperative. The AITF marks the start of a sector-wide initiative to transform the automotive industry by broadening and deepening the participation of black and historically disadvantaged entrepreneurs in the sustainable growth and development of the industry. The Fund means that South Africa’s big OEMs – BMW, Ford, Isuzu, Nissan, Toyota, Mercedes-Benz and Volkswagen – will, for the first time, meaningfully participate and comply with all five elements of the generic broad-based black economic empowerment (BBBEE) scorecard, including the ownership element. In essence, the initiative represents an equity equivalent project, in lieu of the BBBEE scorecard ownership points.

The AITF’s mission will be to accelerate the empowerment of Black South Africans within the automotive sector; the upskilling of Black employees and aspirant automotive entrepreneurs; the expansion of Black owned dealerships, authorised repair facilities and workshops; a substantial increase in the contribution of Black-owned automotive component manufacturers within the automotive supply chain; and creating sustainable employment opportunities for young and female Black South Africans. The AITF will play a key role in the implementation of the South African Automotive Masterplan, especially in terms of localisation and industry transformation. The SAAM 2021-2035 target is in the order of 500 Tier 2 and 3 suppliers, of which 25%, or 130, of these suppliers, need to be Black-owned by 2035, off a very low base currently.

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