The Eastern Cape Development Corporation (ECDC) has unveiled a R50 million blended finance scheme designed to support micro, small, and medium-sized automotive component suppliers and aftermarket service providers based in the Eastern Cape. The initiative, introduced today by ECDC Chief Executive Officer Ayanda Wakaba, targets emerging operators to bridge existing funding gaps and stimulate growth within the sector.
The Automotive Operator Blended Finance Scheme offers a 70% loan and 30% incentive structure to individuals and companies that have been operational for at least 12 months and are majority black-owned. The funding ranges from a minimum of R300,000 to a maximum of R1,000,000 per applicant.
“The scheme is mainly targeted at aftermarket operators, including services and components. It will fund critical industry compliance measures, such as fixed fixtures, equipment, machinery, stock, and specialized training programs,” said Wakaba. “Our goal is to increase the number and size of emerging automotive component suppliers and aftermarket service providers, transforming some into large-scale operators.”
The automotive industry is a significant employer in the Eastern Cape, with around 60,000 people working for Original Equipment Manufacturers (OEMs) and component suppliers. The province’s aftermarket sector comprises many small black-owned operators, providing essential employment and livelihood opportunities. The scheme aims to exploit this sector’s potential, attracting more service opportunities and supporting job creation among micro, small, and medium operators.
Sisa Mbangxa, National President of the Johannesburg-headquartered African Panelbeaters and Motor Mechanics Association, praised the initiative as the first of its kind targeting emerging automotive component suppliers and aftermarket service providers. “This blended finance scheme is critical for our members’ growth, enabling them to compete effectively in the automotive industry. This is excellent news for our 85 members in the Eastern Cape and the 350 members nationwide,” Mbangxa stated.
Wakaba emphasized the Eastern Cape’s rich automotive history, noting the presence of five major OEMs: Daimler Chrysler, Volkswagen, Isuzu, FAW, and BAIC. The province contributes significantly to South Africa’s production volumes and vehicle exports, with many aftermarket service providers and component suppliers playing key roles in the sector.
“However, there is a need for transformation initiatives to empower historically disadvantaged individuals and provide opportunities for new entrants in the industry. Our efforts aim to bring multiple micro, small, and medium component suppliers and aftermarket service providers into the mainstream value chain, opening access to markets and fostering meaningful participation,” Wakaba explained.
The scheme addresses critical access to finance challenges, aiming to eliminate barriers resulting from financial resource limitations. Wakaba acknowledged that while the blended finance intervention is not a panacea for all industry challenges, it represents a significant step towards transforming and empowering the sector.
“Efforts by both the public and private sectors towards transforming the industry must be backed by resources to achieve meaningful empowerment and participation,” Wakaba concluded.
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