User:Rested/Durban Automotive Cluster

The Durban Automotive Cluster (DAC) is a public-private partnership between the eThekwini Municipality in Durban, KwaZulu-Natal (South Africa), and the provincial automotive components industry. Established in 2002, the Section 21 company operates according to a fixed business plan which aligns all activities with a set of common goals common to the parties in the public-private partnership (PPP). The DAC provides services aimed at supporting and developing the competitiveness of this industry, with industry membership of approximately 35 industry participants representing 80% of the regional industry.

KwaZulu-Natal is home to a significant portion of the automotive industry in South Africa, generating regional employment of approximately 20,000 people. Toyota South Africa, the largest vehicle manufacturer in the country, is located in the province, as are several major component suppliers. Over 25% of all light vehicles manufactured in South Africa are produced in KwaZulu-Natal, as well as the majority of the country's vehicle exports. Despite this, South Africa's emerging market status implies a plethora of small manufacturing operations, hindering the industry's ability to exploit market opportunities in a global context of competition, as well as its ability to achieve economies of scale in input purchasing. The DAC was established as a means of addressing related international competitiveness issues facing the local industry, in order to enhance their competitiveness through the adoption of international best practices.

Functions and programmes

The DAC bases its structure and various programmes on the theoretical concepts underlying clustering as an industrial activity. As such, the joint resources of member firms are channelled towards the development of various competitiveness elements common to participants, as identified by the Executive Committee. In particular, these relate to a concern for greater levels of localisation in the industry, due to the cost-raising factors implied by low levels of local content that render the local automotive value chain less competitive. By facilitating increased dialogue between local automotive manufacturers and identifying opportunities for firms to capitalise on national incentives, the Cluster aims to increase local content and improve cost competitiveness.

In addition, the Cluster addresses skills development challenges by drawing on research to identify industry skills gaps and future skills supply requirements of the industry. Member firms acquire the appropriate internal human resource development capabilities through the cluster. Industry transformation objectives are supported and facilitated by cluster-based initiatives, while an infrastructure programme addresses infrastructure and infrastructure-related services impediments to investment and growth opportunities, with a view to reducing cost and improving reliability given current environmental constraints.

Growth opportunities for the KwaZulu-Natal automotive industry are facilitated by the DAC with regard to market access and investment support, in effect engaging on external constraints. Simultaneously, the DAC addresses internal constraints to operational performance through its World Class Manufacturing initiatives and through the KwaZulu-Natal Chapter of the South African Automotive Benchmarking Club.