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Increased Vehicle Investment from Japan

| News by Staff Reporter

SA motor industry may benefit from the recent earthquake and tsunami in Japan


The Department of Trade and Industry (Dti) is gearing up for a shift in South African business as a result of the recent disaster in Japan.

This is according to an article by Business Day in which it was stated that analysts were of the mind that SA should be courting Japanese investment in the local motor vehicle parts industry.

This may have enormous benefits to South Africa, analysts agreed.

“One of the key points of Japanese production is the principle of zero defects,” wrote Prof Garel Rhys for Automotive PR’s website.

“This is not to say that nothing ever goes wrong, but if something does go wrong, it will not be allowed to go wrong again.”

He said Japan would likely branch out to avoid having a single source of production in the future.

“In other words, there will be a major push for inward investment into other countries.

“Countries such as SA will likely do well, since it is midway between Japan and its major western markets: Europe and South America.

“There is no doubt that car manufacturers will urge Japanese component makers to go to invest and bring production facilities into these areas.”

According to Business Day the Dti is planning to approach the Japanese original equipment manufacturers “with the aim of securing investment in the local component industry.”

“With all sensitivity to what’s happened, the huge tragedy in Japan will make companies think about their risk management,” said the Dti.

“The reality is the process is already happening, the process of moving parts of the value chain out of Japan, more so in some industries than others.”

The Department would also seek clarity on how affected the local motor industry would be in light of the recent tsunami in Japan.

Source: www.bizpremises.co.za