The PoTenTial for regional Value Chains in The auTomoTiVe seCTor: Can saDC learn from The asean exPerienCe?

The document examines the AICO scheme's role in developing the ASEAN automotive sector and assesses whether a similar model could work in SADC. It identifies South Africa as the regional automotive leader but notes that integration is currently one-sided. Key barriers in SADC include low market demand, infrastructure bottlenecks, and a lack of indigenous industry outside South Africa. The author suggests that SADC can move toward integration by leveraging South Africa's expertise, focusing on specific vehicle segments, and developing aftermarket production as a starting point.

• The ASEAN Industrialisation Cooperation (AICO) scheme, initiated in 1996, facilitated regional integration by providing preferential tariff rates of 0–5% for participating companies that engaged in industrial complementation and resource sharing, primarily benefiting Japanese automotive companies.
• AICO's success was largely driven by the significant market size of the ASEAN region—with combined vehicle sales in the four major markets reaching nearly 1.5 million units in 1996—and the existence of indigenous industries that allowed for value addition.
• Automotive integration in SADC is currently one-sided, with South Africa exporting 80% of its African automotive exports to SADC countries in 2015, while importing very little from them, indicating a lack of regional value chains.
• SADC faces significant barriers to automotive industrialisation, including a high reliance on imported second-hand cars which impedes new industry creation, substandard infrastructure for water, electricity, and transport, and high labour costs relative to Asia.
• The BLNS (Botswana, Lesotho, Namibia, Swaziland) countries are currently the most viable candidates for regional integration due to their membership in the Southern African Customs Union (SACU) and benefits from South Africa's Automotive Production and Development Programme (APDP).
• To foster regional growth, the author recommends that SADC countries adopt strategies such as focusing on specific vehicle segments (similar to Thailand's focus on 1-tonne pickup trucks) and utilizing aftermarket production as an entry point for countries with low initial capacity.

APA

Markowitz, C. (2016). The PoTenTial for regional Value Chains in The auTomoTiVe seCTor: Can saDC learn from The asean exPerienCe? South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2016/06/Occasional-Paper-231.pdf

Chicago

Markowitz, Chelsea. The PoTenTial for regional Value Chains in The auTomoTiVe seCTor: Can saDC learn from The asean exPerienCe? South African Institute of International Affairs, 2016. https://saiia.org.za/wp-content/uploads/2016/06/Occasional-Paper-231.pdf.

Wikipedia

{{cite report |last1=Markowitz |first1=Chelsea |title=The PoTenTial for regional Value Chains in The auTomoTiVe seCTor: Can saDC learn from The asean exPerienCe? |publisher=South African Institute of International Affairs |date=June 2016 |url=https://saiia.org.za/wp-content/uploads/2016/06/Occasional-Paper-231.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{markowitz2016potential, author = {Markowitz, Chelsea}, title = {{The PoTenTial for regional Value Chains in The auTomoTiVe seCTor: Can saDC learn from The asean exPerienCe?}}, institution = {South African Institute of International Affairs}, year = {2016}, month = jun, url = {https://saiia.org.za/wp-content/uploads/2016/06/Occasional-Paper-231.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }