Point-of-sale technology is critical for South Africa's auto industry revitalisation

Zawya

03-04-2025

The South African automotive sector was lauded as one of the champions of the country's economy, with the President Ramaphosa announcing a variety of investment plans, industrialisation programmes and local production expansion.
While larger operators are ahead of the curve when it comes to tech adoption, smaller players in the aftermarket must not be left behind.
The South African automotive industry is one of the country's most promising economic sectors, driven by significant investments in world-class manufacturing ecosystems.
Special economic zones, such as the Tshwane Automotive Special Economic Zone in Gauteng and the Coega Special Economic Zone in the Eastern Cape, have attracted major original equipment manufacturers.
Companies like the Ford Motor Company, which recently committed R5.2bn to its local operations, are investing in advanced technology and high-quality vehicle production for both local and export markets.
However, skills and infrastructure constraints could still hinder efforts to scale and enhance the industry's sophistication.
BMW "iFactory" principle, for example, uses digitalisation and AI integration in its production processes to enhance sustainability and optimise resource efficiency.
Ford is also heavily invested in big data analytics to track its global supply chain and reduce its carbon footprint, using data to identify areas for improvement in energy consumption and waste reduction.
Likewise, Toyota is actively implementing digital systems within its production facilities around the world, including in South Africa.
While these manufacturers have consistently demonstrated faith in the South African economy, investing billions into cutting technology and dealer networks, the aftermarket, especially on the smaller scale should not be left behind.
While factories may be digitised, even using the latest technology to manage operations, the aftermarket sector is often lagging with limited resources, skills and, more so, competition
Fragmentation and legacy systems
The challenge it faces, however, is a high level of fragmentation, and while competition is good (especially through many small and medium sized enterprises), it can lead to consistencies.
In addition to vulnerability to counterfeit products, which compromise safety and reliability, fragmentation can create significant skills and process inconsistencies.
It is still quite common to find a local parts dealer still using paper to record incoming and outgoing stock deliveries.
Not only is this cumbersome and time consuming it can lead to more errors, reducing customer satisfaction and opening the door to abuse.
For those that use technology, many are still stuck using legacy systems to track their operations.
Cutting costs by implementing technology
Embracing new technology is crucial at every point of the supply chain from the assembly plant to the dealer showroom, to repairs and parts.
Even the smallest parts dealers can benefit from specialised package handling, code scanning and smart barcode label printing devices.
By streamlining operations using intelligent solutions, dealers can free up resources from time-consuming (and error prone) work like manual stock taking. In practice, this can collapse a stock taking from several days to just half a day.
Staff can focus on more strategic and technical tasks that involve dealing with customer needs and better business process.
So, while an investment may be made upfront, the cost savings are immediately felt, if not financially, in terms of time, accuracy and even the stress that these legacy systems cause in workers.
Training is essential
While technology has the potential to fundamentally transform a business, its use needs to be guided by a comprehensive training strategy that emphasises rapidly evolving system.
A basic understanding of modern digital tools, supported by robust data analysis capabilities ensures the users aren't just learning how each platform works, but how their internal processes improve over time.
This is not static, nor is it rigid, but calls for a major shift in how people deploy smart transactional systems in various contexts. This interplay between strategic thinking and intelligent systems can turn something as mundane as supply chain management into innovative solutions that propel an entire industry into the digital economy.
For instance, many companies around the world are using digital twin technology to map virtual replicas of their supply chains, allowing them to simulate scenarios, predict disruptions, and optimise logistics.
The ability to develop innovative strategies and unlock new growth and opportunities knows no bounds, limited only by the creativity and passion of users. The aftermarket, leveraging the broader automative industry's investments and its leading position in South Africa's economy, presents huge potential to introduce new automation technology in a meaningful way, producing both immediate and long-term benefits.