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Trends in South Africa for Automotive Business

Blog on Excellon Dealer Management System

The automotive business is the key driver for South Africa’s economy that contributed to 33.5% of its total output in 2015. With immense expertise in automotive production, South Africa is the biggest vehicle market in the continent.


• Enriched Environment For The Automotive Industry 
Along with matured supplier base, the industry has labor support organizations and established institutional background. At present, SA houses production plants of the auto-manufacturers such as Ford, BMW, Toyota, Daimler-Chrysler and Volkswagen and production bases of component manufacturers like Senior Flexonics, Corning, Bloxwitch and Arvin Exhust.

• ‘Suppliers’ - The Key 
With their quality and reliability, the tier-one suppliers like Sumitomo, Yazaki, Mothersons, Johnson Controls, Festo, Bosch and Behr instills confidence from the local as well as international investors.
However, communication channels amongst OEMs and many small suppliers are manual which hampers the supply chain optimization.
Excellon automotive dealer management system and aftersales solutions in South Africa work as the key to effective communication between the OEMs and suppliers to manage the logistics efficiently, optimizing inventory levels, providing accurate forecasts and aiding to respond to the dynamic customer demands effectively.

• Consumer – The King
In the dynamic economy, consumers prefer to hold on to their existing vehicles for a longer time. Aftersales service in terms of technical and spare parts services is of immense importance in South Africa. In the recent times, there is a demand for environment-friendly vehicles.

• Face Competition Easily With An Automotive Dealership Management System
Continuous pressure for cost reduction, high quality and output is keeping the component suppliers on their toes in addition to the global competition.
Automotive dealership management system can help manage the dealership network efficiently to ensure cost optimization and automated procurement, resulting in customer satisfaction.


• Dealer Management System - The savior! 
Extended order-to-delivery lead times with unreliable production schedules result in excess inventory throughout the industry supply chain.
Usage of dealer management software in SA auto industry can take care of ordering the components at the right time making more reliable timelines and optimum inventory in hand.


• All about Profitability  
Slow and steady investment along with high rent, petrol and electricity costs lead to a reduction in profitability levels. 
Technology in terms of dealer management system can help reduce the cost and optimize the entire value chain efficiency, leading to increased margins and competitive growth of tier-two suppliers.


• New Equations 
Emerging market for renewable energy vehicles and R&D offers new opportunities for component manufacturing. Growing exports (80.3 % increase from 2012 to 2016) with a slower increase in the imports rate (48.7 %) has dropped the trade deficit of the industry from R 42.3 billion in the year 2012 to R 32.9 billion in the year 2016.


• Aftermarket Opportunities 
Longer retention of vehicles will boost the after-sales market. Automotive aftermarket solutions in SA will help efficient management of spares and services with optimum lead-time and safety stock.


• Expanding Horizons 
Expansion of transport corridor projects in East Africa is going to increase the demand for commercial vehicles in East Africa in next five years, which will be an added advantage for the SA auto-industry. 


In the second half of 2017, there have been signs of recovery of new vehicle sales in SA market. Many renowned automakers plan to introduce electric or hybrid vehicles in the market in the near future.The auto manufacturers have the advantage of low production costs along with the new market access due to the trade agreement between South African Development Community and the European Trade Union. Thus, the future seems bright for the domestic market as well as the export.