Automotive Manufacturers Forced to Innovate During Tough Times

www.MyPE.co.za:
Automotive component manufacturers in the Eastern Cape are being forced
to innovate in order to remain competitive or to simply survive
according to the Automotive Industry Development Centre
(AIDC).

AIDC Eastern Cape Supplier Development manager Lance Schultz said local
component manufacturers were still reeling from the global economic
crisis. “The crisis has severely impacted the automotive industry
worldwide. It
has also forced the industry here to re-examine its operations
carefully and to a degree re-invent the way it does business in order
to create the lowest possible cost structure for its products.” and “It
is clearly not a case of business as usual.”

Several component makers closed doors in 2009, including Kolbenco,
South Africa’s only automotive piston manufacturer, which eliminated
the country’s ability to manufacture this product. Among other closures
were RAH Auto, Powdermet, Vinyde, Eaton Aero Quip
and Bloxwich. Listed company, Metair closed its plastics business in
the Eastern Cape at the end of 2009.

Schultz said the AIDC had intensified efforts to assist individual
companies make substantial cost gains to stay afloat and to position
themselves for growth.  The AIDC‘s programs and interventions
on the shop floor, around
improving logistics and in the development of skills and productivity,
are highly subsidised by Provincial Government.

Despite the economic downturn, some automotive companies have continued
to position for growth and persisted in the implementation of
continuous improvement initiatives, Schultz said.

Hansens EngineeringCiting a recent case
study, Schultz highlighted savings of over R309
000 achieved at Port Elizabeth based Hansens Engineering, producer of
precision-machined aluminium components. Schultz said over 75% of
savings were introduced within just 3 weeks by
identifying and reducing wastes, adjusting process flows and increasing
productivity.

NAACAM president Stewart Jennings said the industry is under even more
pressure in 2010 because the strong rand is rendering local exports
uncompetitive. Auto industry bodies have estimated that component
exports nosedived 40% over the course of 2009.
 
“Many suppliers have to be assisted to identify wastes, reduce them and
improve areas of productivity that they may not have believed even
existed within their businesses,” Schultz said.

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