Black Economic Empowerment in the automotive manufacturing industry: a case for productive capacity development transformation

Abstract:The automotive manufacturing industry in South Africa has received little sustained academic attention in terms of Black Economic Empowerment (BEE) or Broad-Based Black Economic Empowerment (B-BBEE). This current contribution is an attempt at laying the basis for greater focus on B-BBEE in the industry. It critically reflects on the economic position and contribution of the automotive manufacturing industry, presents a definitional framework for B-BBEE, and develops an initial critical evaluation of its B-BBEE performance. Our contribution draws attention to how a generalised shift occurred from the narrower BEE to B-BBEE. We unpack the B-BBEE equity equivalents trajectory and foreign-controlled multinational corporations within the automotive manufacturing industry's framework. The methods used include an examination of automotive industrial transformation, policy, and its performance, as well as stakeholder documents and meeting proceedings. Our conclusion reflects on the Automotive Industry Transformation Fund as a synthesis that emerged from the B-BBEE trajectory in the automotive manufacturing industry, and how this positively relates to production development and industrial transformation. This contribution argues for a production development and industrial transformation approach to B-BBEE, with deepening and widening domestic value addition as key objectives and an integral part of localisation, greater attention on diversifying and growing the lower tiers of the supplier base and increasing employment.