The Role of Localisation of the Supply Chain in the South African Automotive Industry

Abstract

Purpose/Introduction- The South African automotive industry plays a pivotal role in the country's economic landscape, and the increasing emphasis on supply chain localisation has prompted a need for comprehensive research. This study addresses three primary research objectives: understanding the influence of institutional dynamics on localisation adoption, identifying effective strategies for supply chain enhancement, and analysing specific impacts on the industry's supply chain networks. As globalization continues to impact industries worldwide, the role of localisation in the automotive sector becomes a critical area for exploration.

Design/methodology/approach- To achieve the research objectives, a mixed-methods approach was employed. Quantitative data was gathered through surveys using a Likert scale distributed across various organisational sizes within the South African automotive industry. The surveys focused on opinions and perceptions related to localisation policies, government regulations, and the impact of such measures on supply chain performance. Additionally, qualitative insights were gathered through questionnaires using open-ended questions, providing a more nuanced understanding of the industry's localisation dynamics.

Findings/Results- The quantitative analysis revealed a significant correlation between the implementation of localisation policies and organisational structure and size. Larger organisations exhibited higher agreement on the effective implementation of localisation policies. Government regulations were identified as significantly associated with the organisational structure during the implementation of supply chain localisation. Findings also underscored variations in perceptions based on organisational size, emphasizing the need for tailored strategies. Furthermore, the study explored the impact of government regulations on localisation measures and their adoption within organisations.

Research limitations/implications - While the study provides valuable insights, certain limitations should be considered. The sample size, though representative, might not capture the entire diversity of the South African automotive industry. Additionally, self- reported data from surveys may introduce biases, and the study's cross-sectional nature limits its ability to capture dynamic changes over time. Despite these limitations, the research lays a foundation for understanding the complexities of supply chain localisation in the South African automotive context and offers avenues for future, more in-depth investigations.

Practical implications- The study's practical implications include the need for targeted policy interventions, size-specific organisational strategies, active engagement in enterprise and supplier development, informed decisions on import taxation, promotion of local content for enhanced competitiveness, and continued collaboration between the government and industry stakeholders. Adhering to these implications is crucial for fostering sustainable development in the South African automotive supply chain