The National Productivity Institute and Numsa this week criticised the motor industry development programme for not generating more sustainable employment or addressing the problem of vehicle affordability.
The National Productivity Institute (NPI) and National Union of Metalworkers of South Africa (Numsa) this week criticised the motor industry development programme for not generating more sustainable employment or addressing the problem of vehicle affordability.
In the past six months, the NPI has looked at the development programme and the possibilities of extrapolating policy lessons for the clothing, textiles, paper and paper products industries. But in tabling its respective report on Wednesday, the institute's head of research Ndumiso Matlala said despite the MIDP's successes, the NPI was concerned that the programme had led to an increase in imports into the local vehicle industries.
The institute said the programme was not an "unmitigated success" and questioned the sustainability of car exports. "In essence, the MIDP has potentially created an export bubble, while at the same time reducing the effective rate of protection given to the domestic market. This will permit a substantial increase in imports, which is a recipe for potential future problems and a reversal of the impressive gains made by the industry in the course of the past few years," Matlala quoted from the report.
Meanwhile, Numsa researcher Jeffrey Ndumo said 95 per cent of consumers in South Africa were unable to afford new vehicles. He added that the MIDP had performed poorly with regard to vehicle affordability and prices had increased at levels above the inflation rate.
"In the US it costs an average of 19 weeks' salary to pay off a new vehicle compared with an average of 208 weeks in South Africa," he said.
The MIDP had performed poorly in terms of "official statistics" on sustainable employment generation, with the programme resulting in job losses totalling 9 900 from 1996 to date.
quoted Ndumo as saying that sectors that had shed jobs were those that were on an export drive, while exporting firms were not creating jobs when they got deals.
"Where they created jobs, these jobs tend mainly to be casuals. In instances where jobs are not lost, exporting companies downgrade full-time employment to casuals as well," he claimed.
In reaction, Naamsa director Nico Vermeulen said the association had not seen the NPI report before its release and many of Ndumo's claims were not factually correct.
"If it wasn't for the MIDP, there would only be two or three motor manufacturers left in the country and employment levels in the motor and component manufacturing industries would be a fraction of what they are today," he said.
Original article from Car