Contemporary management accounting for the sustainable competitiveness of the South African motor manufacturing industry

Abstract

Since the implementation of the Motor Industry Development Programme in 1995, South African motor manufacturers have had to face pressures and challenges to which they had not been accustomed in a very protected environment. These pressures include ever‐intensifying competition, which necessitates increased competitiveness with regard to quality and price. As locally built cars can compete with the best in terms of quality, the primary area of concern for survival has shifted to international competitiveness with regard to price. This research project comprised a literature study and an empirical survey of the developments in the management accounting used by the seven major local motor manufacturers, which together have a 90,8% share of the local market. Conclusions are drawn and recommendations made regarding the implementation and improvement of the contemporary management accounting techniques that are used in the South African motor manufacturing industry. The aim of the project was to contribute towards target pricing, which could result in the increased profitability and competitiveness of the local industry in a highly competitive global market and at a market‐based price.