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n Journal of Contemporary Management - Factors affecting the sustainability of the South African automotive component industry
The automotive industry in South Africa has undergone a major transformation process over the years and has evolved into a much-sheltered and government-supported industry. Therefore the purpose of the study on which this article is based was to investigate the factors that determine the sustainability of the automotive component industry in South Africa.
This was a cross-sectional study conducted among 114 top managers in the component industry using a self-administered anonymous questionnaire. The questionnaire was distributed using the online program, QuestionPro. The results showed that more than a third of the companies were internationally owned. Most respondents believed that their technologies as well as their equipment were equal to that of global economies. Foreign investment and incentives were poor in the automotive sector.
It was found that pricing was lower but labour costs were higher in South Africa compared to developing countries. In order to compete with other developing countries, the South African firms need to formulate strategic partnerships through joint ventures, licencing and technology agreements and to reduce labour cost in cooperation with global market players in order to make use of the influence that they have in the supply chain.
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