South Africa’s automotive industry is experiencing reduced local content, increased imports and the impact of new US tariffs, placing strain on manufacturers and suppliers.
Weak local sales, a rise in imports and low localisation levels have contributed to 12 company closures and more than 4 000 job losses over the past two years, Trade Minister Parks Tau told delegates at an auto parts conference on Wednesday.
According to Tau (Reuters), sales of locally produced vehicles totalled 515 850 in the past year, below the South Africa Automotive Masterplan 2035 target of 784 509. About 64% of vehicles sold in South Africa are imports, and localisation remains at about 39%, below the 60% target.
Tau said new US tariffs have affected the country’s R28.7 billion automotive exports. He said that a 5% increase in local content could generate about R30 billion in new procurement.
The industry employs about 115 000 people directly, including more than 80 000 in component manufacturing.
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Industry analysts say the tariffs imposed in April may put some firms at risk of losing contracts in the United States, which could affect jobs and supplier revenue.
Government incentives for local manufacturing now include electric vehicles and related components.
Manufacturers such as Stellantis and China’s Chery are considering expanded local production, with Stellantis planning to begin construction in the Eastern Cape.
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