South African auto industry suffers closures, 4,000 jobs lost
Reduced domestic sales, an increase in imported vehicles, and stagnant local content levels have led to the closure of 12 companies and the loss of over 4,000 jobs in South Africa’s automotive sector over the last two years, Trade Minister Parks Tau stated on Wednesday.During an auto parts conference, Tau highlighted that South Africa manufactured 515,850 vehicles in 2024, which falls significantly short of the target of 784,509 outlined in the South Africa Automotive Masterplan 2035. Currently, imports constitute 64% of vehicle sales, while the localisation — the share of local labor, assembly, and components — remains at 39%, well below the 60% objective.
The minister cautioned that the newly enforced U.S. tariffs are severely affecting the nation's R28.7 billion ($1.64 billion) automotive exports, with some manufacturers facing the loss of contracts. The industry employs approximately 115,000 individuals, including over 80,000 in component manufacturing.
In reaction to this situation, South Africa presented a revised trade proposal to Washington on Tuesday to negotiate a reduction in the 30% tariff imposed by U.S. President Donald Trump last week. Tau also revealed that an incentive program for local manufacturing has been broadened to encompass electric vehicles and related components.
“Localisation is not just a matter of policy adherence; it is a question of survival,” Tau said, stressing that a 5% boost in local content could unlock R30 billion in new procurement opportunities — greatly surpassing the R4.4 billion U.S. export market.
Major global automakers like Stellantis and China's Chery are considering local production options, with Stellantis planning to commence construction of a facility in the Eastern Cape.
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