By Mandla Mpangase
Enterprise and supplier development (ESD) is central to expanding the participation of South African micro, small and medium enterprises (MSMEs) in the automotive industry and strengthening local manufacturing, according to the Tshwane Automotive Special Economic Zone (TASEZ).
Speaking on the sidelines of the 2nd International Special Economic Zones Infrastructure and Investment Conference in Durban in July 2026, TASEZ Enterprise and Supplier Development Senior Manager Sibusiso Khuzwayo said ESD provides a practical mechanism for opening opportunities across the automotive value chain while advancing industrial transformation.
“Enterprise and Supplier development under B-BBEE (broad-based black economic empowerment) has a framework that looks at procurement, enterprise development and supplier development,” Khuzwayo said. “We have not yet seen significant participation by MSMEs in the automotive sector, and ESD is the vehicle that will ensure they become part of the value chain, from production through to the aftermarket.” The 3% net profit after tax allocated for ESD may be used for financial and non-financial interventions to ensure MSMEs participate in the mainstream automotive industry.
Khuzwayo said TASEZ occupies a unique position between government, community and industry, enabling it to identify supply chain opportunities and develop programmes that respond to both policy priorities and industry demand.
“We don’t manufacture vehicles. We host businesses that manufacture vehicles and components, which allows us to understand what industry needs and what government wants, and then develop programmes that bring the two together,” he said.
He described ESD as “the cornerstone” of transforming South Africa’s automotive sector.
“If we develop MSMEs, the economy moves faster. The more opportunities we create for small businesses, the more jobs they create and the greater the economic impact.”
A key focus, he said, is expanding opportunities for women-owned businesses, young entrepreneurs, people with disabilities and military veterans through partnerships with organisations that specialise in supporting these groups.
“We first have to find the right businesses, understand what they can offer and then match those capabilities with industry needs.”
Working with partners such as Ford and the Automotive Industry Development Centre (AIDC), TASEZ is identifying supply chain gaps where local companies can replace imported products.
“If an imported component takes 10 weeks to arrive, but a South African company can produce it locally within hours, that is an opportunity. But businesses must be competitive on price, while consistently delivering the quality the automotive industry demands.”
Khuzwayo urged emerging suppliers to build capability progressively instead of focusing immediately on supplying vehicle manufacturers.
“Ford should be the cherry on top. Businesses should first build experience with Tier 3, Tier 2 and Tier 1 suppliers. By the time they reach an OEM (original equipment manufacturer), they are ready to meet the industry’s demanding standards.”
He acknowledged that misconceptions about B-BBEE and unrealistic expectations from some entrepreneurs remain obstacles to successful supplier and enterprise development.
“Many businesses believe the first requirement is funding, but the industry is looking for capable suppliers that understand quality, consistency and the realities of supplying the automotive sector.”
Alongside developing new enterprises, TASEZ is strengthening businesses in the maintenance space who already are within its supplier base. More than 80% of suppliers supporting TASEZ’s maintenance activities are black-empowered businesses, with supplier development workshops helping them improve their competitiveness and understanding of the quality of work expected.
“Our priority is to sustain the suppliers already working with us while creating a pipeline of new enterprises that can participate in the automotive value chain,” Khuzwayo said.
The conference highlighted the growing role of Special Economic Zones as catalysts for industrialisation, localisation and inclusive economic growth.
For TASEZ, enterprise and supplier development is increasingly becoming one of the most effective tools for ensuring that these benefits extend beyond major manufacturers to South Africa’s emerging businesses and entrepreneurs.