Globalization and restructuring in the South African automotive industry

TLDR

The South African automotive industry has undergone rapid structural change driven by liberalized import policies and export encouragement, leading to greater international integration but leaving unresolved rationalization issues and questions about export sustainability. This study evaluates the impact of these policy-driven developments on the industry. The analysis argues that liberalization costs have been modest, largely because major foreign firms have incorporated South African operations into their global networks. © 2001 John Wiley & Sons, Ltd.

Abstract

Abstract The South African automotive industry has been subjected to rapid structural change as a result of policies, which have liberalized imports but also encouraged exports. The sector has become much more internationally integrated with a particularly rapid increase in exports. This paper assesses these developments. It is argued that the costs of liberalization have been fairly low partly because of the strong encouragement given by the programme for major foreign firms to draw South African operations into their international networks. In spite of the successes, structural problems remain such as the limited rationalization that has so far taken place. Also there are question marks over the nature and sustainability of export expansion. Copyright © 2001 John Wiley & Sons, Ltd.