IMPORTS FROM INDIA, CHINA DEEPEN AFRICA'S AUTO CRISIS

South Africa is buckling under a tide of imports from the two Asia countries, factory closures and rising unemployment

- Bloomberg

China's rapid rise to become the world's biggest car exporter has been driven by significant overcapacity at home, meaning its automakers compete with South African manufacturers at home and abroad.

(AFP)

Luthando Kolisi jokes that if he finds work at another factory, it will probably end up shutting down. That's how he lost his last two jobs. Since being let go from the Goodyear Tire & Rubber Co. factory in Nelson Mandela Bay—a coastal South African city that is the heart of the country’s automotive industry—he’s sent out countless applications, while eking out a bit of cash from odd jobs. “I'm slowly beginning to lose that hope,” he said.

The auto sector makes up the biggest share of South Africa's manufacturing and its contribution to the country's economic output rivals that of the mining sector, but it is buckling under the pressure of rising costs and a flood of cheaper imports from India and China. Companies, including giant manufacturers Toyota Motor Corp. and Volkswagen AG, are clamouring for urgent policy interventions to help them compete. In a rare alignment, unions and investors have joined forces to do the same.

In Nelson Mandela Bay, Goodyear is not the only plant to have shed jobs. The municipality lost 41,000 jobs last year, according to official statistics. Among all of South Africa’s metro regions, Nelson Mandela Bay experienced the steepest jump in joblessness, with more than 28% of people out of work in the final quarter—up from less than 22% a year before.

"It used to be called the Detroit of South Africa,” Mziyanda Twani, a local leader of the National Union of Metalworkers of South Africa, said from his office overlooking the centre of Nelson Mandela Bay. Now, without drastic action to save the industry, he said, “this area is soon going to be defined as a ghost town.”