Latest news with #Mabasa
The Citizen
a day ago
- Business
- The Citizen
Here is how SMEs can prioritise their employees
'With the right approach, even the smallest business can attract, build and retain a team that performs like a powerhouse.' Many businesses often forget to prioritise their employees, overlooking the fact that they are the ones who put in the work and make ideas become a reality. If employees are not happy, it often shows in the business's performance. FNB is warning small and medium enterprises (SMEs) that not prioritising employee productivity could significantly hinder the success and growth of their business. 'The key to driving productivity is a clear, people-first strategy built on the four pillars of incentives, benefits, culture and education', says Palesa Mabasa, Business Development Head: SME Funding at FNB Business. She highlights that productivity is not about pushing people harder, but creating an environment where people want to show up, contribute and grow. Incentives for employees Mabasa highlights that incentives are one of the most effective levers for boosting performance. It does not have to be anything complicated; it can be a commission, performance bonuses, or creative perks like weekend getaways or vouchers for top performers. However, it remains important that these incentives are fair, transparent and directly tied to results. 'Even the best incentive programmes can backfire if they are seen as opaque or biased. That is why clear Key Performance Indicator (KPIs) and regular performance feedback are vital.' ALSO READ: Work and lifestyle goes hand in hand: Game-changing benefits to attract top talent in 2025 Employee benefits Mabasa notes that employee benefits play a crucial role in enhancing productivity and employee retention. 'While many SMEs assume benefits are too costly or complicated, she urges business owners to think differently. 'Simple offerings like funeral cover, pension contributions or medical savings options can go a long way towards making employees feel secure and valued.' Company culture Another factor that boosts employees' productivity is an open and inclusive culture, rooted in shared purpose and values. 'If your team understands where the business is going, and they believe in that vision, they will offer your business that highly prized discretionary effort, that only comes from truly engaged employees. 'Strategy must be explained in a way that everyone understands their role in delivering on it.' She highlights that culture is not just about feel-good values on a poster; it's about daily behaviours that everyone buys into and, very importantly, the behaviours that are not acceptable. ALSO READ: How to create a healthy work environment for employees Importance of education Mabasa says the final piece of the productivity puzzle is employee education, particularly in areas such as financial literacy and tax matters. 'Many employees do not understand how a bonus affects their tax, or why certain deductions appear on their payslips. Without that understanding, even generous benefits can cause confusion or frustration.' She recommends SMEs to focus on delivering financial education to staff, as this will reduce misunderstandings around payslips and benefits. Employee education can also foster a more financially responsible and resilient workforce, one that is not only financially confident but also driven to perform. 'With the right approach, even the smallest business can attract, build and retain a team that performs like a powerhouse.' NOW READ: Remote work vs return to office: The battle for workplace culture, pay and productivity
Daily Maverick
15-07-2025
- Automotive
- Daily Maverick
Socioeconomic crisis looms as US tariffs hit Eastern Cape's vital automotive industry hard
The Automotive Business Council says it is hopeful that a proposal for 40,000 tariff-free vehicles for export to the US will find favour, as the impact of tariffs in their current form will be catastrophic for both the manufacturing industry and the Eastern Cape. 'This is not just a trade issue, it's a socioeconomic crisis in the making,' CEO of the Automotive Business Council (Naamsa) Mikel Mabasa said on Tuesday. The organisation, like many others in the Eastern Cape, is grappling to come to terms with the devastating impact of export tariffs imposed by the United States. Mabasa said the export tariffs threatened thousands of jobs in the automotive sector, disrupted hard-won industrial capabilities, and risked devastating communities such as East London, where the automotive sector formed the economic heartbeat of the town. He said Naamsa was, however, encouraged by South Africa's early proposals for a quota of 40,000 duty-free vehicle units per annum, 'which would allow us to retain our footprint in this key market'. He said that if the country could not retain export markets such as the US, 'we risk turning vibrant industrial hubs into ghost towns'. Ripple effects through the value chain He said the ripple effects of production loss due to disappearing export markets would be felt throughout the automotive value chain – from component manufacturers to logistics providers, and across the thousands of workers and families who depended on the sector for their livelihoods. 'Export diversification and finding new markets is not something that can be achieved overnight. Our global competitors are already redirecting their exports into markets we traditionally serve. This intensifies the pressure on our original equipment manufacturers (OEMs), who must now absorb rising costs, reduce production, and reconsider future investments,' he said. Urgent diplomacy needed 'We have also taken note of President Cyril Ramaphosa's formal response on the same day, which confirmed South Africa's diplomatic and strategic approach to this matter. He said South Africa's automotive sector was particularly vulnerable to the 25% sectoral tariff imposed under Section 232 of the US Trade Expansion Act of 1962, which specifically targeted automotive exports. This escalation in trade tensions poses a serious threat to one of South Africa's most globally integrated and export-oriented industries. He said the United States had consistently been South Africa's second-largest trading partner and key export destination for South African manufactured vehicles. Agoa at risk – billions in trade and thousands of vehicles 'Since the inception of the African Growth and Opportunity Act (Agoa), the automotive industry has benefited from substantial two-way trade and investment. In 2024, the auto sector accounted for 64% of all Agoa trade between South Africa and the US, generating R28.6-billion in export revenue, with 24,681 vehicles exported to the US under Agoa,' Mabasa said. He said the effect of just the anticipation of the high export tariffs, however, had been devastating to the industry and had an immediate effect on trade performance. He said that even before the formal effect of the tariffs, vehicle exports to the US dropped by 73% in the first four months of 2025, followed by a further decline of 80% and 85% in April and May, respectively. 'This represents a risk of a direct loss of vehicle and component export volumes, and annual export earnings, which would be difficult to recover in the short term,' he said. OEMs under pressure But the news is even worse, he said, as tariff disruptions placed major pressure on [OEMs], who had made long-standing industrial commitments to South Africa and invested significantly in local manufacturing, skills development and export infrastructure. The SA automotive industry contributes 22.6% of the country's total domestic manufacturing output and directly supports 110,000 formal sector jobs. Mabasa said Naamsa welcomed the SA government's continued diplomatic engagement with the US, including discussions held on the sidelines of the US-Africa Summit in Luanda on 23 June 2025, and the submission of SA's Framework Deal on 20 May 2025 to address the concerns raised by the US government. 'We urge both governments to accelerate negotiations toward a balanced, rules-based trade agreement. We are encouraged by early proposals for a quota of 40,000 duty-free vehicle units per annum, which would allow us to retain our footprint in this key market. It's vital that we use this opportunity to preserve the business case for continued investment', he said. Mabasa, however, emphasised the need to prepare for a more uncertain and competitive global landscape. Behind every statistic are people and communities 'Naamsa is equally concerned about the livelihood impact of these developments. Behind every tariff statistic are real people – auto workers, supply chain technicians, logistics operators and their families. Nowhere is this more visible than in East London, a community that has grown and thrived on the back of automotive exports. 'The erosion of this trade threatens to unravel decades of socioeconomic progress. We urge all parties involved in the diplomatic negotiations to recognise the strategic and social importance of safeguarding mutually beneficial trade frameworks like Agoa, and to avoid short-term decisions that carry long-term consequences for vulnerable regions,' Mabasa said. CEO of the Nelson Mandela Bay Business Chamber Denise van Huyssteen, said it was clear that the US trade tariffs, planned for implementation on 1 August, would have a disproportionate impact on the Eastern Cape economy given its high reliance on the automotive sector. 'The initial most vulnerable automotive and components manufacturers will be those who directly export products to the United States. The tariffs will put them in a very uncompetitive position, making it difficult to continue to do trade with the US, which could lead to export orders drying up. This, in turn, will have a knock-on impact on direct and indirect suppliers located in East London and Nelson Mandela Bay, and the overall supporting ecosystem around these manufacturers, who may or may not be able to withstand the loss in volume. 'Additionally, as the volumes, especially of [OEMs], potentially decline, economies of scale are diminished, potentially putting some components manufacturers in a position where they are unable to continue a viable supply to their other OEM customers located elsewhere in the country,' she said. Competitiveness crisis She said the tariff structure also meant that manufacturers who exported products to other parts of the world may now be competing with other countries that had significant cost advantages over South Africa, as they faced lower tariffs or could absorb the tariffs. 'Essentially, the global trade order has been upended, and this is likely to affect global manufacturing footprints and where the best locations will be to produce products in the future,' Van Huyssteen said. She said that switching markets was not a quick solution as these measures took time to implement, and neither would 'replace' current OEMs with new ones. 'On this score, and in order to retain employment, it is vital that any potential incoming OEM investors commit to utilising local components for their manufacturing operations,' she said. Unemployment warning for Nelson Mandela Bay She said the chamber also remained deeply concerned about the devastating impact these 'tariff wars' might have on Nelson Mandela Bay's economy and the thousands of jobs supported directly and indirectly through the automotive industry and its supply chain. 'This, in turn, will add to the already unacceptably high unemployment and poverty levels in Nelson Mandela Bay and the Eastern Cape. It must be remembered that Nelson Mandela Bay is home to the greatest number of automotive component suppliers in the country. Furthermore, 41% of the country's automotive manufacturing employment is based in the Bay,' she said. Call for government urgency 'Given how small SA's economy is, the country's response should not be to retaliate, but rather to look internally and consider deploying incentives to support local manufacturers, rather than to keep others out by way of tariffs. This should also incorporate policy support and assistance in establishing new markets for SA-produced goods.' She called for urgency on the side of the government. 'The government needs to move fast and take action in addressing barriers such as excessive red tape and complex policies associated with doing business in the country. Absolute urgency is required to improve the country's competitiveness versus other emerging locations, which have, over the years, become much more attractive investment destinations. 'These even include some countries on this continent who have surpassed South Africa in some key performance areas. Priority focus must be placed on ensuring that the basic enablers are in place, such as well-maintained infrastructure, efficient logistics and the delivery of basic services at a local municipal level, to help improve the competitiveness of local manufacturers and to sustain their continued operations in the Bay.' MEC warns Mercedes-Benz may exit Speaking at the Finance Committee in the Council of Provinces last week, Eastern Cape MEC for Finance Mlungisi Mvoko said they had held discussions with the Department of Trade, Industry and Competition (DTIC), as the matter significantly affected the Eastern Cape. He highlighted that Mercedes-Benz, currently exporting 90% of the vehicles it manufactures in East London to the United States, was facing the most risk. Mvoko warned that the company might consider withdrawing from South Africa due to the tariff changes. Mvoko said that if Mercedes-Benz were to leave, it would have devastating consequences for the East London Special Economic Zone (SEZ), where many companies existed solely to supply the vehicle maker. He also made it clear that thousands of families in East London and Qonce were reliant on Mercedes-Benz operations. DM
The Citizen
15-07-2025
- Automotive
- The Citizen
Devastating impact of US tariffs on SA automotive sector even before implementation
South Africa's automotive sector already reflects the devastating impact of the US tariffs and a socio-economic crisis in the making. The announcement and anticipation of the US tariffs already had a devastating and immediate impact on trade performance, even before the tariffs were implemented. Vehicle exports to the US dropped by 73% in the first quarter of 2025, followed by a further decline of 80% in April and 85% in May. Mikel Mabasa, CEO of the National Association of Automobile Manufacturers of South Africa (Naamsa), the Automotive Business Council, says this represents a risk of a direct loss of vehicle and component export volumes and annual export earnings, which would be difficult to recover in the short term. And it is not just the export volumes. Mabasa says this is not just a trade issue, but a socio-economic crisis in the making, as the US tariffs directly threaten thousands of jobs in the automotive sector, disrupt hard-won industrial capabilities, and risk devastating communities, such as East London, where the auto sector forms the economic heartbeat of the town. 'If we cannot retain export markets like the US, we risk turning vibrant industrial hubs into ghost towns.' Mabasa says in a press statement that Naamsa noted the official communication from US President Donald Trump to the South African government last week to notify the country of the unilateral 30% reciprocal trade tariff, as well as President Cyril Ramaphosa's formal response that confirmed South Africa's diplomatic and strategic approach to this matter. ALSO READ: How will the 25% US import tariff affect SA's auto industry? Automotive sector particularly vulnerable to 25% sectoral tariff 'South Africa's automotive sector is particularly vulnerable to the 25% sectoral tariff imposed under Section 232 of the US Trade Expansion Act of 1962, which specifically targets automotive exports. This escalation in trade tensions poses a serious threat to one of South Africa's most globally integrated and export-oriented industries.' He says the US has consistently been South Africa's second-largest trading partner and key export destination for vehicles manufactured in South Africa. Since the inception of the African Growth and Opportunity Act [Agoa], the automotive industry has benefited from substantial two-way trade and investment. In 2024, the auto sector accounted for 64% of all Agoa trade between South Africa and the US, generating R28.6 billion in export revenue, with 24 681 vehicles exported to the US under Agoa. The impact is also not on the sector itself, but also on original equipment manufacturers, value chains, and local economy. Mabasa says these tariff disruptions place major pressure on original equipment manufacturers [OEMs], who have long-standing industrial commitments with South Africa and invested significantly in local manufacturing, skills development and export infrastructure. 'The ripple effects of production loss due to disappearing export markets will be felt throughout the entire automotive value chain, from component manufacturers to logistics providers and across the thousands of workers and families who depend on the sector for their livelihoods. ALSO READ: BMW SA 'not exposed' to current US tariff uncertainty Finding new export partners will not happen overnight 'Export diversification and finding new markets is not something that can be achieved overnight. Our global competitors are already redirecting their exports into markets we traditionally serve. This intensifies the pressure on our OEMs, who must now absorb rising costs, reduce production and reconsider future investments.' He points out that the automotive sector is a cornerstone of the economy, contributing an impressive 22.6% to total domestic manufacturing output and directly supporting over 110 000 formal sector jobs. 'The tariffs – and the broader uncertainty in US-Africa trade relations – strike at the heart of South Africa's industrialisation agenda and threaten future investment in high-value manufacturing. They also undermine the significant progress made under Agoa to deepen US-Africa trade.' Mabasa emphasises that Naamsa welcomes government's continued diplomatic engagement with the US, including discussions held on the sidelines of the US-Africa Summit in Luanda in June and the submission of South Africa's Framework Deal in May to address the concerns raised by the US government. 'We urge both governments to accelerate negotiations toward a balanced, rules-based trade agreement. We are encouraged by early proposals for a quota of 40 000 duty-free vehicle units per year, which would allow us to retain our footprint in this key market. It is vital that we use this opportunity to preserve the business case for continued investment.' He says Naamsa continues to engage closely with government counterparts, providing data and strategic insights to support trade negotiations, and is also exploring additional export markets beyond the US urgently. ALSO READ: US tariff of 30% on SA exports: where to now? Time to prepare for more uncertain and competitive landscape in automotive sector Although Mabasa expresses optimism about diplomacy, he emphasises the need to prepare for a more uncertain and competitive global landscape. The US market remains crucial for South Africa, not only for trade flows but also for industrial stability and investor confidence. In addition, Mabasa points out that Naamsa is equally concerned about the impact of these developments on people's livelihoods. 'Behind every tariff statistic are real people – autoworkers, supply chain technicians, logistics operators and their families. Nowhere is this more visible than in East London, a community that has grown and thrived on the back of automotive exports. The erosion of this trade threatens to unravel decades of socio-economic progress. 'We urge all parties involved in the diplomatic negotiations to recognise the strategic and social importance of safeguarding mutually beneficial trade frameworks like Agoa and to avoid short-term decisions that carry long-term consequences for vulnerable regions. 'Naamsa remains deeply committed to South Africa's economic growth and industrial development, and we are optimistic that a constructive path forward will be reached through continued engagement and collaboration.'
IOL News
15-07-2025
- Automotive
- IOL News
South Africa's vehicle exports to US decimated by Trump's tariffs
South Africa's vehicle exports to the United States have dropped dramatically Image: Supplied South Africa's vehicle exports to the United States have dropped dramatically following the imposition of US tariffs, with declines of 73% in the first quarter of 2025, and further falls of 80% and 85% in April and May, respectively. This is according to the Automotive Business Council (Naamsa), which said that the sudden collapse in exports threatens one of "South Africa's most globally integrated industries" and poses a serious risk to jobs, investment. Earlier this year, US President Donald Trump imposed a 25% tariff on all vehicles imported into the US and has since upped the ante on South Africa, informing President Cyril Ramaphosa last week that South Africa will be hit with a 30% tariff on all its exports to the United States from August 1. "The announcement and anticipation of the recent tariffs have had a devastating and immediate impact on trade performance, even before the formal effect of the tariffs," the industry body said. "Vehicle exports to the U.S. dropped by 73% in Q1 2025, followed by a further decline of 80% and 85% in April and May, respectively. This represents a risk of a direct loss of vehicle and component export volumes, and annual export earnings, which would be difficult to recover in the short term". The US has been South Africa's largest trading partner and "key export destination for SA-manufactured vehicles". "Since the inception of the African Growth and Opportunity Act [AGOA], the automotive industry has benefited from substantial two-way trade and investment. "In 2024, the auto sector accounted for 64% of all AGOA trade between South Africa and the U.S., generating R28.6 billion in export revenue, with 24,681 vehicles exported to the United States under AGOA". Naamsa CEO Mikel Mabasa warned that the tariffs are not just a trade issue but a socio-economic crisis in the making. 'This is not just a trade issue - it's a socio-economic crisis in the making. The U.S. tariffs directly threaten thousands of jobs in our sector, disrupt hard-won industrial capabilities, and risk devastating communities such as East London, where the auto sector forms the economic heartbeat of the town. If we cannot retain export markets like the U.S., we risk turning vibrant industrial hubs into ghost towns.' Mabasa said He added that the ripple effects of production loss due to disappearing export markets will be felt across the entire automotive value chain. 'Export diversification and finding new markets is not something that can be achieved overnight. Our global competitors are already redirecting their exports into markets we traditionally serve. This intensifies the pressure on our OEMs, who must now absorb rising costs, reduce production, and reconsider future investments,' added Mabasa. IOL News [email protected] Get your news on the go, click here to join the IOL News WhatsApp channel
IOL News
02-07-2025
- Automotive
- IOL News
South Africa's automotive industry braces for potential US export tariffs
The Automobile Business Council (Naamsa) on Tuesday said vehicle exports increased by 2 647 units year-on-year to 36 343 units exported in June from the 33 696 units exported during the same month last year Image: Supplied South Africa's automotive industry has expressed anxiety about the potential impact of the impending export tariffs from the United States after vehicle exports rose by 7.9% in June, despite the growing toll of geopolitical and trade-related disruptions. The Automobile Business Council (Naamsa) on Tuesday said vehicle exports increased by 2 647 units year-on-year to 36 343 units exported in June from the 33 696 units exported during the same month last year. The automotive industry contributes 5.2% to South Africa's gross domestic product (GDP), 3.2% in manufacturing and 2.01% retail. In 2024, the export of vehicles and automotive components reached a record amount of R268.8 billion, equating to 14.7% of South Africa's total exports. Vehicles and components are exported to 155 international markets. However, Naamsa noted with anxiety that trade-related uncertainty looms large as the 90-day reciprocal trade reprieve extended by the US is scheduled to expire next week. Naamsa CEO Mikel Mabasa said that while the reprieve did not explicitly apply to Section 232 tariffs on automotive products, it formed part of the broader negotiation framework that will be critical in determining South Africa's continued preferential access to the US market. As such, Mabasa said ongoing engagement and negotiation over automotive exports will be vital to protect the sector's long-term trade position and export earnings. 'South Africa's automotive industry has long relied on a thriving export engine to sustain production volumes and attract investment,' Mabasa said. 'However, the current trade policy shifts, particularly from the United States, pose a real challenge to this model. To address this, our response must be strategic: diversifying markets, expanding regional trade, and continuing to advocate for fair and rules-based global trade systems.' According to data from Naamsa, the new vehicle sales demonstrated unwavering domestic momentum in the first half of 2025, closing this period strong. Aggregate new vehicle sales climbed once again by 18.7% or 7 444 to reach 47 294 units in June from the 39 850 units sold in June 2024 - reflecting a sustained and broad-based recovery in consumer and fleet demand. This was in line with Naamsa's earlier projection for a robust domestic performance in the first half of 2025. For the first half of the year new vehicle sales were now 13.6% ahead of the corresponding period 2024, supported by and large by an influx of affordable imported models. For the year-to-date [January to May 2025], Naamsa said new light vehicle imports by the Original Equipment Manufacturers (OEMs) increased by 25.6% and by the independent importers by 33.4% compared to the corresponding period 2024. Brandon Cohen, national chairperson of the National Automobile Dealers' Association, said the majority of the growth was centred in the sub-R400 000 segment. 'This price point remains critical for volume, affordability and trade-ins, with a direct knock-on effect on pre-owned sales performance. The used vehicle market is benefiting from improved affordability metrics, driven by softened interest rates, favourable vehicle pricing, and the rollout of the two-pot retirement savings reform,' Cohen said. The upbeat performance in domestic new vehicle sales builds on gains since the fourth quarter of 2024. Mabasa said this success was underpinned by a combination of favourable economic fundamentals. These include decreasing interest rates following the South African Reserve Bank's further 25 basis points cut in May, a still-benign inflation backdrop, and improved credit access across the market. 'The first half of 2025 has shown just how resilient and responsive our domestic market truly is. Strong consumer demand, supported by positive economic fundamentals, has helped the automotive sector deliver impressive growth amid global turbulence,' Mabasa said. However, the current market is only 1.5% ahead and 2024 volumes were 14% lower in the same month compared to June 2023.
