Quick Takeaways
- South Africa automotive industry stakeholders are urging stronger localisation and policy support to secure long-term growth.
- Automotive Industry Master Plan 2035 progress highlights gaps in local content, jobs, and supplier development.
On January 28, the Portfolio Committee on Trade, Industry and Competition of South Africa called for deeper localisation, job creation, and meaningful transformation across the South Africa automotive industry while reviewing progress under the Automotive Industry Master Plan 2035.
Review of Automotive Industry Master Plan 2035 Progress
The Department of Trade, Industry and Competition reported that vehicle production volumes, employment levels, and exports have rebounded to pre-COVID benchmarks. However, overall performance continues to trail the targets set under the Master Plan, particularly in terms of local value addition.
Local content remains capped at around 40%, a level that continues to restrict broader job creation and the expansion of domestic supplier networks within the South Africa automotive industry. Officials noted that without higher localisation, the sector’s multiplier effect on the wider economy remains limited.
Structural and Market Challenges Impacting Growth
Authorities also highlighted persistent structural pressures facing the sector, including intensified competition from lower-priced imported vehicles, ongoing global economic uncertainty, and the accelerating global shift from internal combustion engines to electric vehicles.
These dynamics are reshaping investment priorities and production strategies, placing additional strain on local manufacturers and component suppliers as they adapt to new technologies and cost structures.
Industry Calls for Policy and Incentive Reforms
Industry stakeholders emphasised the urgent need to restructure existing tax and incentive frameworks to encourage domestic vehicle production and boost local sales. They warned that the growing presence of inexpensive imports and semi-knocked-down assembly operations is eroding demand for locally manufactured vehicles.
According to industry representatives, this trend directly threatens employment across the value chain and weakens the long-term sustainability of domestic manufacturing operations.
Role of Public Procurement in Supporting Local Manufacturing
Stakeholders further called on the government to apply public procurement policies more assertively, especially in public fleet management. Greater prioritisation of locally produced vehicles in government purchasing, they argued, could provide stable demand, support domestic manufacturers, and reinforce localisation objectives under the Automotive Industry Master Plan 2035.
The review reinforced that achieving the long-term ambitions of the South Africa automotive industry will depend on coordinated policy action, stronger localisation incentives, and sustained collaboration between government and industry.
Review of Automotive Industry Master Plan 2035 Progress
The Department of Trade, Industry and Competition reported that vehicle production volumes, employment levels, and exports have rebounded to pre-COVID benchmarks. However, overall performance continues to trail the targets set under the Master Plan, particularly in terms of local value addition.
Local content remains capped at around 40%, a level that continues to restrict broader job creation and the expansion of domestic supplier networks within the South Africa automotive industry. Officials noted that without higher localisation, the sector’s multiplier effect on the wider economy remains limited.
Structural and Market Challenges Impacting Growth
Authorities also highlighted persistent structural pressures facing the sector, including intensified competition from lower-priced imported vehicles, ongoing global economic uncertainty, and the accelerating global shift from internal combustion engines to electric vehicles.
These dynamics are reshaping investment priorities and production strategies, placing additional strain on local manufacturers and component suppliers as they adapt to new technologies and cost structures.
Industry Calls for Policy and Incentive Reforms
Industry stakeholders emphasised the urgent need to restructure existing tax and incentive frameworks to encourage domestic vehicle production and boost local sales. They warned that the growing presence of inexpensive imports and semi-knocked-down assembly operations is eroding demand for locally manufactured vehicles.
According to industry representatives, this trend directly threatens employment across the value chain and weakens the long-term sustainability of domestic manufacturing operations.
Role of Public Procurement in Supporting Local Manufacturing
Stakeholders further called on the government to apply public procurement policies more assertively, especially in public fleet management. Greater prioritisation of locally produced vehicles in government purchasing, they argued, could provide stable demand, support domestic manufacturers, and reinforce localisation objectives under the Automotive Industry Master Plan 2035.
The review reinforced that achieving the long-term ambitions of the South Africa automotive industry will depend on coordinated policy action, stronger localisation incentives, and sustained collaboration between government and industry.
Industry reports & Public Disclosures | GIA Analysis
Click above to visit the official source.
Share: