The role of automotive manufacturers in the supply chain diversity programmes of black-owned motor dealers in South Africa

Abstract

Automotive franchise dealerships in Suth Africa are predominantly white owned. Research shows that inclusion of black ownership in the automotive supply chain has historically been skewed toward upstream. This research set out to explore why, despite regulatory requirements, efforts by the OEMs, industry bodies and the interest by black investors, there are still a few black-owned automotive franchise dealers. Research confirms that there has been limited study on the progress of BBBEE in the downstream supply chain of the automotive industry with a particular focus on black dealership owners. Qualitative research was undertaken to explore this knowledge gap on BBBEE through diversity and inclusion, supplier selection, supply diversity and sort to gain understanding on the supplier development plans of the 7 manufacturing OEMs. Thematic analysis of the results shows that the selection processes and actions of the OEM do not align with their ambitious plans to transform the dealer network. OEMs have since changed the selection of dealer investors to include black ownership requirements, which they deviate from at their discretion. This is further aided by the absence of regulatory policing on compliance on such aspect of transformation. The results do not show concrete supplier development programmes to bring about the necessary transformation. The OEM stringent requirements to qualify for dealerships with high barriers of entry remain in place. These barriers include capital and extensive experience in the automotive industry, experience which the black investors with the capital do not have, and capital which black potential investors that have experience cannot access.