As the world shifts towards new energy vehicles (NEVs), South Africa stands at a crossroads in the automotive industry. The challenge? Building a sustainable NEV sector that supports local industry, creates jobs, and keeps us competitive in the global market. At a recent presentation, Prof. Kriengkrai Techakanont highlighted how Thailand’s journey in the automotive industry offers powerful insights into achieving this goal.
🔹 From Infant Industry to Competitive Advantage Prof. Techakanont explained that Thailand, like many emerging economies, began in the “Infant Industry” stage, where domestic production was protected to grow local capabilities. Unlike countries like Japan and South Korea, which quickly moved to high-tech innovation, Thailand focused on a Competitive Advantage-Following (CAF) strategy. This incremental approach relied on foreign capital for early industrialisation but gradually built a strong local base for manufacturing, evolving into a key player in NEVs.
🔹 Key Takeaways for South Africa Thailand’s three design attributes for CAF success resonate strongly for South Africa:
- Embeddedness Autonomy: Thailand created policies like local content requirements, developed collaboratively with industry players. This government-business synergy fostered policies that were both ambitious and achievable. South Africa’s automotive sector could benefit from similar collaboration to ensure NEV policies align with industry realities.
- Carrots and Sticks: By offering substantial benefits to companies that aligned with national objectives, Thailand incentivized growth and compliance. A targeted incentive structure could help South Africa accelerate its NEV transition while encouraging local innovation.
- Accountability: Measurable goals allowed Thailand to track and adjust its strategies effectively. Clear milestones and accountability frameworks could provide South Africa with the agility needed to remain competitive and sustainable in the global NEV landscape.
🔹 The Path Forward For South Africa, Thailand’s journey offers a roadmap: protect and nurture nascent industries, foster public-private partnerships, and adopt transparent, measurable policies. This approach not only prepares us for a greener future but also secures our place in the rapidly evolving automotive industry.
As the global automotive landscape shifts, adopting a strategy inspired by Thailand’s CAF approach could be the key to positioning South Africa as a leader in NEV manufacturing across Africa.