The Effects of the Global Economic and Financial Crisis on the South African Automotive Industry

Abstract

The global economic and financial crisis has had a severe impact on the South African automotive industry, which is the market relevant to this study. This research therefore aims to examine and explain the effects of the global economic crisis on the South African automotive industry. The objectives of this study are to explore and to investigate the supply chain issues facing OEMs and franchise dealerships, to determine whether the global recession has brought the automotive industry to the edge of another major change; a fourth revolution, to determine whether the motor industry should receive a government bailout and to explore and investigate the resultant work restructuring levels of managers in the South African automotive industry. A positivist research approach was adopted. A research strategy encompassing an explanatory and descriptive survey design was used in this research. The research instrument in the form of questionnaires were designed and uploaded on Survey Monkey ® in order to collect primary data. The participant’s responses were then analysed using quantitative means.

The results of the study emphasised that the South African automotive industry has become an increasingly significant contributor to the South African economy and therefore adds value to the South African economy. It was evident that the South African economy has suffered negative economic consequences as a result of the effects of the global economic and financial crisis. These negative consequences have led to job losses and reduced disposable income in the local economy. It was found that consumers have prolonged the purchasing of high value items like motor vehicles which has resulted in a decline in income for large automotive firms. It was established that the provision of government assistance for the automotive sector was essential. Due to the downsizing of management staff, managers were forced to manage more than a single department resulting in increased workloads, stress and job insecurity. It was evident that managers were spending less time with their families and more time at work. Hence the need to restructure the work levels of managers was emphasised in this research.

Keywords: Economic, Financial Crisis, Automotive Industry, Management, Restructuring.