April 17, 2024

The secret to landing big customers in the automotive sector

3 min read

South Africa’s automotive industry plays a vital role in the country’s industrialisation drive. According to industry statistics, the sector contributes significantly to our gross domestic product, with manufacturing representing a substantial portion of this contribution. More specifically, small and medium-sized enterprises (SMEs) contribute approximately 34% and play a vital role as drivers for reducing unemployment and aiding economic growth.

Yet, despite this, SMEs face many challenges accessing big customers in their industries due to difficulties in meeting the required standards of big business. According to Kyle Ballard, head of accelerators: Durban Automotive Cluster (DAC), the secret to overcoming these challenges lies in ensuring your value proposition is aligned with big customers’ needs. To help guide SMEs, he shares a helpful tool, referred to as the 6Cs Framework.

“The 6Cs Framework – Commitment, Capability, Competitiveness, Compliance, Capacity and Cash – serves both as the foundation and roadmap for SME success,” he elaborates. “Following this framework enables them to transform into businesses that big corporates are eager to work with and serves to close the divide between being recognised as a promising supplier and actually securing sought-after purchase orders.”

SMEs aspiring to engage with large enterprises should evaluate their readiness by assessing how they measure against the critical 6C elements:

  1. Commitment – In any relationship, commitment is key. It involves always going the extra mile to meet customer requirements and adding value. Proactiveness and unwavering dedication to problem-solving are vital.
  2. Capability – SMEs must demonstrate their ability to meet customer demands head-on. Displaying expertise in required processes, equipment and skills instils confidence and builds trust. For example, SMEs in manufacturing or ancillary services who have strong engineering design capabilities, reliable quality assurance processes and world-class manufacturing leadership competencies are sought after in the automotive sector.
  3. Competitiveness – Staying in the game involves hitting benchmarks such as price, quality, reliability, flexibility, logistics, you name it. Standing out with unique strategies and innovative products or service offerings gives you a competitive edge.
  4. Compliance – Trust is built on consistency, especially when it comes to following the rules: from financial to health and safety. Maintaining compliance with industry standards demonstrates your credibility and commitment to business excellence. Those SMEs that are IATF and ISO9001 compliant will have an additional advantage.
  5. Capacity – Are you able to handle the workload and fulfil contractual obligations? Demonstrating existing manufacturing capacities and plans for growth shows dependability.
  6. Cash – Ensuring healthy cash flow management proficiencies is also key. Having sufficient cash reserves for raw materials, working capital and even investments for expansion inspires confidence and potential for growth.

“By addressing the 6Cs comprehensively, SMEs can position themselves as reliable and capable future partners for big customers, increasing their chances of unlocking significant commercial opportunities,” Ballard advises. “Merely having the fundamentals in place is not enough.”

Additionally, seizing opportunities for strategic growth and collaboration can lead to innovative solutions and a stronger market presence. And that’s where the DAC Accelerator comes in. This unique initiative is specifically designed to propel SMEs in the automotive sector toward success by providing market access, standards upgrading and capital investment interventions. Unlike traditional business accelerator programmes, the DAC Accelerator is a manufacturing-focused initiative that aligns with the needs of major industry players and offers SMEs invaluable insights into customer requirements, and trade and industry transformation opportunities.

Spearheaded by the unwavering support of the eThekwini Municipality and leading industry giants like Toyota South Africa Motors (TSAM), Hesto Harnesses and Toyota Boshoku South Africa, the DAC Accelerator aims to drive localisation, empowering black industrialists to forge strategic partnerships within the automotive industry.

Kim Nisbet, senior manager of Localisation and Materials at TSAM, says: “We’re excited to partner with the DAC Accelerator. This is an important avenue to find and develop new suppliers to drive localisation and transformation within our value chain.”

Applications for the 2024 DAC Accelerator are now open until 15 April 2024, offering SMEs the opportunity to discover what customers want and secure significant contracts. Don’t miss this opportunity to overcome industry challenges and thrive.

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