South Africa

Automotive 

The automotive market is diverse. It ranges from Original Equipment Manufacturers (OEMs) and component manufacturers, to dealerships and commercial vehicle manufacturers. Financial pressures, industry restructuring, changing consumer preferences, fluctuating fuel prices and the growing demand for more ‘eco friendly’ vehicles are transforming the world’s automotive industry. The past year has seen the industry in South Africa go through cutbacks in production and with our export markets in crisis, it is likely to lead to further cutbacks. The impact on component supplies is magnified as they have high levels of stock and battle for profitability, having geared up for large volume growth.

Gavin Maile

Gavin Maile

Africa Automotive & Construction Leader

+27 (0)11 647 7165

A number of South African component suppliers have ceased operations and others may follow, which could result in local merger and acquisition activity in order for OEMs to secure component suppliers. In addition, job losses will continue.

 

Despite market chaos, overcapacity, and declining profits, the distractions of the recession haven’t taken the executives’ eyes from capitalising on new emerging market opportunities and from focusing on fuel technologies. To prosper — indeed, just to survive — in such a demanding environment, industry participants are being forced to develop more flexible business models and embrace new management tools and skill sets.


How we can help


KPMG’s South African Automotive industry team advises clients with a range of critical company and industry matters, including:

 

  • Reporting and regulation
  • Climate change and sustainability
  • Research & development tax concessions, grants and MiDP/APDP
  • Plant location analysis, closures and relocations
  • Mergers, acquisitions and asset disposals
  • Restructuring and debt advisory
  • Market entry and expansion
  • Assurance and audit services 
  • Dealer diagnostics and benchmarking
  • Demographic analysis
  • Supply chain optimisation.


In the future there will be potential for growth across many areas, from the booming manufacturing and domestic markets in developing economies, to the research and development of 'greener' vehicles and fuels. KPMG’s Automotive team offers a pro-active, forward-thinking service to our firms' clients to help ensure that the potential for growth in the industry is not missed, and that the issues and challenges faced by the industry can be overcome.