Profile of Who We Are

• Established 1980

• Over 180 members with 260 plants

• Members comprise 70% of dedicated auto

component manufacturing companies in SA

• Independently elected President and two

Deputy Presidents, and 4 Executive

Committee members

• 5 Regions with Chairmen and Deputy

Chairs – quarterly meetings for members in

each region

Electrical / Electronic

Chassis and Drive-train

Body

Exterior

Interior

Current Breakdown of costs and Local Content

XX%: % of total material cost YY%: true local material plus value add as % of total material cost

19%

15%

33%

23%

10%

14%

•Axles•Differentials•Drive shafts•Brakes

•Harnesses•Starter motors•Alternators•Wiper systems•HVAC

•Glass•Paint•Bumpers•Mirrors

•Cockpit•Seats•Door panels•Carpets

•Bonnets•Bootlids•Sideframes•Doors

6%

5%

3%

7%

Joint OEM Initiative

To Increase Local Content:

• Improve local suppliers’ competitiveness

- Develop local suppliers (including Tier 2/3)

- Consolidate local supplier base

- Consolidate OEMs’ business (increase

commonality of local suppliers)

• Align existing OEM technologies and / or specifications

wherever possible

• Attract new technologies and / or suppliers

Approach: 5 Joint

OEM Teams

• Chassis and Drivetrain

• Electrical / Electronic

• Exterior

• Interior

• Body

Team Approach

• List all commodities per Commodity Group

• Analyse commodities, e.g.

- Local vs. import

- High value commodities not available in SA

- Local commodities with high import content

- Local commodities available locally but suppliers

not well supported or well developed

• Select high priority projects and assign

project leaders & team members

• Selective engagement of suppliers

• Meet regularly, track progress

Opportunities - Body

• Pressed part localisation: investigating potential for further localisation of under body, skin panel and reinforcement parts as well as hand brakes

• Steel supply chain cost: looking for opportunities to optimise costs throughout the steel supply chain

• Press shop JV with international partners: facilitating various JV’s with multinational partners

• Localisation of BTR material for hot forming: looking to replace imported BTR steel with local equivalent. Local equivalent already approved overseas, local testing due for completion by October 2010.

Opportunities - Interior

• Localisation of cloth and other textiles. Headliner material lamination trials in progress.

• Plastic injection moulded seat profiles. One OEM has approved local sourcing, others investigating.

Opportunities - Exterior

• Increase local raw materials (Polypropylene) in local injection moulded plastic parts. OEMs studying potential for commonisation of PP specs and in discussions with potential supplier.

• Automotive paints products: looking to increase local raw materials in various locally produced paints products.

• Weather strips localisation: phase 1 would be limited to importation of extrusions with local cutting to size and then assembly; phase 2 would include local moulding of extrusions. Several OEMs in RFQ process with potential supplier.

Opportunities - Chassis

• Driveshafts: looking to re-establish manufacturing of driveshafts in SA following closure of only local manufacturer in May 2009.

• Brake calipers: investigating potential to deepen localisation by localising castings, machining and plating.

Opportunities – Electrical/Electronic• Instrument clusters: localisation of certain sub-components

plus local assembly. Potential local supplier negotiating technical support agreement with global supplier.

• Evaporator core: local supplier negotiating with global supplier for localisation of coating technology.

• Motors and Alternators: increase local content by identifying suitable local Tier 2 & 3 aluminium die castings suppliers.

• Trailer module: investigating the potential for a local supplier to supply a common trailer module to several OEMs.

• Batteries: AGM battery manufacturing facility at local supplier being commissioned.

• Vehicle harnesses: investigating opportunity to develop Tier 2 and 3 suppliers to localise competitive aluminium cables and wires as well as Halogen free wire.

Challenges & Opportunities

• Maintaining local content on new models with high

levels of new technology

• Global excess capacity of many suppliers

• Supplier development capabilities of local

organisations?

• Team member participation

• Fast track introduction of certain new suppliers

through acquisition of existing suppliers