South Africa could lose its position as Africa’s dominant vehicle producer and consumption market, executives warned at the Naamsa Autoweek conference in Gqeberha’s Coega industrial zone.
They said stagnation would lead to South Africa being overtaken by countries on the continent that are ramping up industrialisation efforts.
“We are concerned to notice Morocco’s ambitions to manufacture 1-million vehicles in 2025, which was our stated objective under the South African automotive masterplan 2035 — by 2035,” said Neale Hill, Ford SA president.
According to Hill, Morocco recently attracted $5.6bn (R96.5bn) investment from China for the construction of an EV factory. He cited investments of R1bn and R15bn in Egypt and Kenya, respectively, to establish tyre manufacturing plants. Neale contrasted this with the loss of South Africa’s Goodyear tyre plant, which left 900 workers in Kariega unemployed, ending a 78-year run.
The Ford president said the new energy vehicle (NEV) roadmap was not moving despite promises from President Cyril Ramaphosa.
“Consider a country like Ethiopia, which has over 100,000 EVs on its roads, versus just over 4,000 in SA — a turnaround requires urgency and deliberate action in a short space of time.”
Gqeberha is home to manufacturers such as VW, Mercedes-Benz, Isuzu and Ford, and an extensive component manufacturing supply chain.
Naamsa president and Isuzu SA CEO Billy Tom said service delivery remained a major impediment to the sector’s growth.
“At municipal level we battle to get officials to understand challenges. For instance, down the road that runs 1km from this venue we have a vehicle storage facility — the robot never works and I worry about accidents. We had to physically connect electricity to our premises to ensure the robots work,” he said.
Tom said the first half of 2025 showed the resilience of South Africa’s vehicle market, which registered a 3% increase in vehicle exports despite the 25,000-unit loss as a result of tariffs imposed by US President Donald Trump.
The Mercedes-Benz plant in East London was hard hit by the tariffs, with the US market being a key destination for its sole product, the C-Class. Newly-appointed co-CEO Abey Kgotle said the company continues to evaluate its options, but no decision has yet been taken around the future of the facility, which has been in operation since 1958.
Toyota SA CEO Andrew Kirby called for a revision of the taxes applying to cars built locally to stimulate the market and stave off cheaper Chinese contenders.
BMW SA CEO Peter van Binsbergen noted that South Africa now accounts for over half of the continent’s automotive production, with Germany, the UK and France being the top three destinations for exports. With the looming EU and UK market bans on internal combustion engine (ICE) vehicles, Van Binsbergen believes Africa has the potential to become a key player in the global EV value chain due to its abundance of mineral resources.
Thato Magasa, CEO of Mitsubishi and Tata under the Motus banner, remarked that new car buyers in South Africa were overwhelmed with choice, as there are as many as 50 passenger car brands and more than 2,200 model derivatives available.
Toyota SA CEO Andrew Kirby called for a revision of the taxes applying to cars built locally to stimulate the market and stave off cheaper Chinese contenders.
“Luxury tax of ad valorem made sense in 1995, but we are now taxing lower-end vehicles as if they were premium products,” he said. Kirby believes the new domestic vehicle market, which accounts for just under 600,000 unit sales a year, has the potential to grow beyond 700,000 units.
“A big gap lies in local supply, in 2024 we talked about 412,000 locally-produced vehicles ― we achieved a fraction of that, at 180,000 units.”
Kirby said 2024’s export performance was remarkable under the circumstances, tallying 387,000 units, close to the prediction of 432,000. He said the motor industry needed to diversify export destinations beyond the EU and UK.
“We don’t want to be relegated to being a conventional ICE manufacturing base; it might be fine for the next five years, but it will prove disastrous in the coming decade.”
Numsa general secretary Irvin Jim called on the government to protect the domestic market, blasting Chinese importers for the flood of cheaper components and vehicles.
He said that in 2018 Chinese and Indian imports accounted for less than 1% of the market, a figure that has risen to 26%.
“We need to claw back the market, foreign brands must set up plants in South Africa and localise. Local content in vehicle production is going backwards, to date over 12 component plants have shut down.”
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