Globalisation and Trade Policy Reform: Whither the automobile components sector in South Africa

As in the case of many formerly inward oriented economies, South African industry is facing a new competitive environment as trade barriers fall. the initial result of this reform in trade policy has been a sharp increase in the trade deficit in the automobile and components sector. A survey of the major auto assemblers and a comparative review of the automobile sector in Brazil and India suggests that the prognosis for the future of the South African components industry is not good unless corrective action is taken. This will involve responses from a variety of stakeholders. A number of policy responses are discussed identifying both the relevant stakeholder and the policy instruments which might be utilised.