TC Manufacturing (TCM)'s experience exemplifies the growing possibilities for South African small and medium sized suppliers. The founder of the company, Mthembeni Mkhize, grew up under the apartheid system, vowing to "make sure poverty will end with my generation and never again affect myself, my family, my community, my country, and the global environment where I will get a chance to participate." In 1996, Mr. Mkhize opened TCM to produce interior and exterior vinyl products for the auto industry. Today, TCM employs 60 people and has contracts from Ford, DaimlerChrysler, Toyota, Mazda and Mitsubishi. Its products range from vinyl truck covers to interior gear shields. In 2002, TCM outgrew it factory and moved its operations to a larger accommodation.

The KPL Aluminum & Die-Casting Factory, started by Sally Marengo in a township outside of Johannesburg in the early 1990s, is another success story. Ms. Marengo began her operations distributing bathroom accessories to the black townships. Seeing little growth, she diversified and expanded her operations, beginning to manufacture products including aluminum spindles for the automotive industry. Taking advantage of marketing and technical assistance from the U.S. Agency for International Development (USAID) funded South Africa International Business Linkages (SAIBL) program, KPL dramatically increased its sales and expanded its workforce. In 1999, it won a large contract from an international motor component manufacturer to supply aluminum spindles for seat belts. KPL signed a contract for over $1 million and recently renewed it for five years at a value of approximately $2.7 million.

By contracting to local SMEs such as TC Manufacturing and KPL Aluminum, the large international auto companies are empowering historically disadvantaged companies, an action that falls in line with the South African government's new Black Economic Empowerment initiative.

Corporate Social Responsibility

Complementing the economic growth and jobs created by the international automotive companies in South Africa are their flourishing Corporate Social Responsibility Programs. Daimler Chrysler, for example, operates under the philosophy that as its global networking increases, so must its worldwide social responsibility. The company has thus engaged in various initiatives to ensure job security for employees, contribute to the local economy and encourage cultural exchange and social development at production locations and company-owned sales and service outlets.

Daimler Chrysler's program, Economic Assistance for SADC Nations, was launched in 1996 to strengthen small and medium-sized businesses in Southern Africa by teaching companies how to be more competitive in the international marketplace. The program seeks out business contacts in Germany, informing investors about the potential benefits of investing in Southern Africa. With a focus on improving the skills of emergent companies' employees, the program also holds workshops in southern Africa. Behind these initiatives is the belief that international competitiveness is essential for survival. The idea is that if business in the region is to survive, it must become internationally competitive.

Motoring Into the Future 

South Africa's automotive industry has proven a great boon for the country, serving as one of the most impressive, while largely unknown, business success stories in recent years. It also offers optimism for the country's- and potentially the continent's- economic future.

So, next time you ride in a Mercedes, enjoy the leather seats and think about the business opportunities they generate in Africa.

Sonya Penn is the Manager of the Communications and Public Relations Department at the Corporate Council on Africa.

¹ National Association of Automobile Manufacturers of South Africa Annual Report 2003.

1 | 2