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Location, Automotive Policy, and Multinational Strategy: The Position of South Africa in the Global Industry since 1995

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  • ANTHONY BLACK

Abstract

The South African automotive sector has become much more integrated into the global industry since 1995. Rapid export expansion has shifted its orientation fundamentally away from its focus on the small domestic market and the industry is widely regarded as a success story of South Africa's democratic transition. However, important vulnerabilities remain, and it is by no means clear that the mode of integration has been particularly favorable to the long‐term development of the industry. The relatively small size of South Africa's domestic market and its regional location pose clear disadvantages in terms of attracting international investment. Integration into the global industry has therefore been partial and continues to reflect a degree of hesitancy by multinational firms to make really major commitments to the South African industry. The warning signs include recent import expansion and low local content in domestically assembled vehicles. Automotive policy has also produced distortions, encouraged uneconomic investments, and led to unforeseen side effects. These impacts limit the gains that have been made and are likely to cause complications in the future.

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  • Anthony Black, 2009. "Location, Automotive Policy, and Multinational Strategy: The Position of South Africa in the Global Industry since 1995," Growth and Change, Wiley Blackwell, vol. 40(3), pages 483-512, September.
    • Handle: RePEc:bla:growch:v:40:y:2009:i:3:p:483-512
    DOI: 10.1111/j.1468-2257.2009.00491.x
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    2. Odile Mackett, 2022. "Decent Work in the South African Macroeconomy: Who are The Winners and Losers?," Humanistic Management Journal, Springer, vol. 7(2), pages 277-305, October.
    3. Andreoni, Antonio & Tregenna, Fiona, 2020. "Escaping the middle-income technology trap: A comparative analysis of industrial policies in China, Brazil and South Africa," Structural Change and Economic Dynamics, Elsevier, vol. 54(C), pages 324-340.
    4. Scully, Ben & Mvundura, Wellington & Nyirenda, Tessa & Tambulu, Bukiwe & Zikalala, Usithandile, 2023. "Cars and clothes in South Africa's Covid experience: The contrasting fortunes of two manufacturing sectors in South Africa," IPE Working Papers 223/2023, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    5. Justin Barnes & Anthony Black & Kriengkrai Techakanont, 2017. "Industrial Policy, Multinational Strategy and Domestic Capability: A Comparative Analysis of the Development of South Africa’s and Thailand’s Automotive Industries," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 29(1), pages 37-53, January.
    6. Anthony Black, 2011. "Trade Liberalization, Technical Change and Firm Level Restructuring in the South African Automotive Component Sector," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 3(2), pages 173-202, July.

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