As luck would have it, and through no planning on my part, my path has recently crossed two ends of the automotive pecking order, one in Kariega (formerly Uitenhage), and one in Los Angeles.
It is impossible to tire of visiting car factories. Their vastness, acreage, scale and complexity and the sheer number of people is always a kick. At Kariega the Volkswagen line builds a car every 94 seconds, 24 hours a day for five days a week. One in five of the cars — built on the same line — is a Polo Vivo, for local sale only, with the rest being Polos for the local market and for export.
It’s sometimes easy to mistake the SA motor industry as being some kind of homogeneous thing, represented strongly by vehicle manufacturers’ and importers’ association Naamsa, whereas in fact the seven manufacturers based here have increasingly divergent business models and regulatory needs.
Some, like BMW and Mercedes-Benz, are principally exporters. Toyota, in Durban, runs a line aimed at the local market (Hilux, Hiace, Corolla Cross) and also exports. Ford (with the Ranger bakkie) and Volkswagen both need a local market to make their business models work.
SA Motor Inc is therefore vulnerable to the changing mores and needs of its key markets. If the Europeans panic about carbon emissions and say they will ban internal combustion engines in 2035, that lands like a grenade in the head offices of SA auto exporters and the regulators trying to plan policy.
In his recent budget speech finance minister Enoch Godongwana announced that the government’s support package for investments made by automakers is to shift to electric vehicles (EVs). It’s all part of a broader plan to get EV manufacturing started in SA, including an ambitious plan to move battery cell production and battery assembly operations to SA, something that makes sense, according to the department of trade, industry & competition, because so many of the critical minerals are here in any case. It is, in the world of minister Ebrahim Patel, a gift of an opportunity to beneficiate a mineral into a fully built product.
The problem for some of the manufacturers is that the support package focuses on production, not the local market, and it has taken two years to come to fruition. Whose fault that is depends on who you ask. Everybody blames everyone else.
But what is undeniably true is that EVs are stubbornly expensive. Automakers have to date failed to bring EV prices down to parity with entry-level internal combustion engine (ICE) cars of matching quality. The manufacturers like to complain about the taxes at the border, where EVs are hit with higher taxes, but this is just a supplementary reality on top of the truth that EVs are expensive with and without the taxes.
And so, the manufacturers seem to agree that without some kind of market support here in SA to drive local demand, the transition to electric motoring in SA is a distant idea, and that in turn will make EV manufacturing a difficult sell at head office.
How this plays out — and whether the manufacturers are telling the truth — will be seen in our local plants. The next big model change due is at VW. With changes under way at the firm’s huge factory in Spain, the SA plant is the only one in the world now building the Polo, a notable vote of confidence from the Wolfsburg company. The current Polo will run out soon though, and will not be replaced on the Kariega line because the next Polo is likely to be an all-electric car.
VWSA is keeping quiet about what will come next, but the company will probably build an ICE-powered light sport utility vehicle for African and other Global South markets. In other words, regulatory change came too slowly in SA, and in the absence of any regulatory market support there is no likelihood of a significant EV market developing here or on the continent any time soon. So VW has voted with its feet for the near term. The changes do mean VW can ramp up EV production in future if it wants to.
Being a rule-taker is no fun as there is limited space to influence how things pan out. But creativity is a powerful tool if given space to operate. At Frieze LA, a vast art fair hosted at the Santa Monica Airport, celebrated SA artist Esther Mahlangu’s latest collaboration with BMW blows the mind. Here, using something called e-ink, her famous Ndebele friezes come alive, changing colours and incorporating written messages, all on the flanks, wheels, bonnet and roof of the concept BMW i5 Nostokana.
A trip to BMW’s design studio Designworks in Santa Monica illustrates the speed and scale of what artificial intelligence (AI) is doing to design and industrial design. It can make the mundanities of tax regulations and market reform in SA seem distant and ridiculous, but in this unknown lies the opportunities of the future.
The lesson I took from these two encounters is that SA will struggle to become a centre of EV manufacturing excellence when we are so slow to response to trends that develop overseas. Mahlangu’s creative genius is long understood, but the creative and ethical use of AI in design opens an endless set of opportunities.
AI is only as good as the data set it interrogates, usually what is already on the internet. SA, and Africa as a whole, is so very undigital in so many ways that it offers a large and enormously diverse data set of humanity, culture and solutions that are simply unimaginable in California and Munich.
That’s an opportunity, and not just in design. I don’t doubt that motor manufacturing will continue in SA. The future of design and the quest for solutions can also be “beneficiated” here, and that’s the longer road to leadership and success that could transform SA from a cheap manufacturing location to being a solutions engine for the future.
• Parker is Business Day editor-in-chief.
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