Black Economic Empowerment in the Automotive Manufacturing Industry: A Case for Productive Capacity Development Transformation

Mashilo, Alex Mohubetswane
Moothilal, Renai
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Southern Centre for Inequality Studies (SCIS)
University of the Witwatersrand, Johannesburg
The automotive manufacturing industry has received little, if any, sustained academic attention on Black Economic Empowerment (BEE) or Broad-Based Black Economic Empowerment (BBBEE). Most of the work is in the form of news capturing the reactions of industry role players, especially the lead firms in the automotive value chains, to BEE or BBBEE regulatory changes, and individual lead firms’ transformation initiatives. This working paper represents a modest attempt at laying the basis for a sustained focus on BBBEE in the automotive manufacturing industry, the mainstay of South Africa’s manufacturing base. We argue for a production development and industrial transformation approach, with the objectives of deepening and widening domestic value addition as part of localisation, and increasing employment with greater attention on expanding, diversifying and growing the lower tiers of the supplier base – the second and third-tiers.
Black Economic Empowerment, Automotive manufacturing industry, Black Economic Empowerment (BEE), Broad-Based Black Economic Empowerment (BBBEE), Production development and industrial transformation approach, Productive Capacity Development Transformation