South Africa’s automotive industry is to lobby the government to accept its planned R3.5billion transformation fund as an equity equivalent initiative for the ownership pillar of the new broad-based black economic empowerment (BBBEE) codes.
Nico Vermeulen, the director of the National Association of Automobile Manufacturers of South Africa (Naamsa), the representative body of new vehicle manufacturers, said on Friday that the idea of establishing a sector code had been abandoned and the seven locally based original equipment manufacturers (OEMs) would operate independently in terms of the generic BBBEE scorecard.
However, Vermeulen said these OEMs had a major challenge in regard to ownership, because they did not have any equity for sale as they were wholly-owned subsidiaries of global multinational companies.
“In that regard, the OEM venture capital (transformation) fund was formulated and is now the subject of discussion and negotiation with the Department of Trade and Industry (dti),” he said.
Jeff Nemeth, the former chief executive of the Ford Motor Company of South Africa and president of Ford sub-Saharan Africa, told Business Report in 2015 that multinationals did not like to dilute their brands and found the ownership pillar in the new codes “very onerous”.