South Africa’s automotive components industry stands at an important crossroads, facing big challenges like job losses, reliance on imports, and global trade problems. But there are also exciting opportunities through government support, regional growth in the Eastern Cape, and access to new markets across Africa. Leaders call for fresh ideas, teamwork, and fairness to ensure more women, young people, and historically excluded groups share in the industry’s future. With innovation and local investment, South Africa can turn these challenges into a strong, inclusive, and green automotive future.
South Africa’s automotive components industry faces challenges like import reliance, job losses, and global trade tensions. Opportunities include government incentives, the Automotive Masterplan 2035, regional growth in the Eastern Cape, and expanding markets through the African Continental Free Trade Area (AfCFTA). Innovation and inclusivity are crucial for transformation.
The NAACAM Show 2025 in Nelson Mandela Bay brought together South Africa’s leaders in automotive manufacturing and policymakers. Among them, Deputy President Paul Mashatile addressed a crowd filled with industrialists, union representatives, and government officials. The event’s timing was not merely logistical; it coincided with the anniversary of the famous 1956 women’s march, a landmark in the nation’s fight for equality.
Mashatile’s speech echoed the historical significance of the women’s march, drawing inspiration from that spirit of bravery and transformation. He emphasized the parallels between past struggles for justice and the present-day pursuit of inclusivity within the automotive sector. The Deputy President recognized that, while progress had been made, the industry must still work hard to ensure women, young people, and historically marginalized communities are fully represented in its workforce and leadership.
South Africa’s current stewardship of the G20, under the theme “Solidarity, Equality, Sustainability,” further underscored the importance of building an inclusive industry. Mashatile urged stakeholders to ensure that the pace of transformation matches the country’s ambitions and addresses the expectations of global markets, which increasingly demand resilience, innovation, and responsible leadership.
South Africa’s automotive industry holds a prominent position in the national economy. It contributes 22.6% of manufacturing output and accounts for 5.2% of the country’s gross domestic product. Its extensive supply chains connect the nation to international markets, including Germany, Japan, and the United States, making it both a symbol of economic strength and a vital source of jobs.
Despite its accomplishments, the industry faces mounting obstacles. Mashatile highlighted a growing reliance on imports, outdated infrastructure, and the approaching shift toward electric vehicles. The sector has also felt the pinch of a weaker global economy and rising tariffs. Over the last two years, the closure of twelve component firms led to the loss of more than 4,000 jobs – figures that illustrate the harsh reality behind South Africa’s official unemployment rate of 33.2%.
For Mashatile, these statistics translate into everyday struggles for South African families and communities. The Deputy President stressed that, unless the industry takes decisive steps, these challenges will continue to undermine growth and social cohesion. He called on all stakeholders to recognize the urgency of the moment and find innovative solutions to ensure that the sector thrives in a rapidly changing landscape.
The impact of these challenges extends beyond the automotive sector. Each job lost reverberates through families and communities, deepening inequality and threatening the vision of shared prosperity that has guided South Africa since the end of apartheid. The sector’s future depends on its ability to adapt, collaborate, and uplift those most affected by economic shocks.
Recognizing the automotive sector’s significance, the South African government has introduced several proactive measures. The Automotive Investment Scheme provides grants to encourage investment in new technologies and vehicle models. The government has also implemented tariffs and incentives to support local manufacturing and solidify domestic supply chains. Organizations such as the Automotive Industry Development Centre (AIDC) have become vital partners, offering skills development, enterprise support, and the administration of incentive programs.
Central to these efforts is the South African Automotive Masterplan 2035. This strategy sets ambitious, yet achievable, targets: raising annual vehicle production to 1.4 million units, increasing local content to 60%, doubling sector employment, and accelerating economic transformation. A cornerstone of the Masterplan involves expanding opportunities for Black industrialists, particularly within the Tier 2 and Tier 3 supplier segments, ensuring broader ownership and participation.
The Automotive Production Development Programme (APDP), now in its next phase, gives these objectives a concrete policy foundation. The APDP draws on lessons from other postwar industrial strategies, such as those that powered economic recovery in Europe and Asia. By bolstering local manufacturing, the program aims to insulate the sector from global shocks and create new pathways for growth.
However, global dynamics continue to shape the sector’s prospects. The recent 30% tariff imposed by the United States on South African automotive exports poses a significant threat. This action jeopardizes not only direct exports but also the viability of broader value chains, as local suppliers lose their competitive edge against countries benefiting from preferential trade agreements. Mashatile made it clear that the government would intensify diplomatic efforts to safeguard jobs, investment, and industrial capacity in the face of such external pressures.
The Eastern Cape remains a vital engine for South Africa’s automotive industry. With well-established ports, a skilled workforce, and a strong industrial tradition, the region continues to attract new investment. Companies such as Shatterprufe and Ebor Automotive Systems demonstrate that, even in challenging times, local businesses can innovate and adapt.
Ebor Automotive Systems stands out as a model of transformation and empowerment. As a Black-empowered Tier 1 supplier, the company prioritizes local ownership and employee participation, with over 200 workers included in its Employee Share Ownership Program. This approach reflects the broader goals of the Automotive Masterplan, demonstrating that inclusive business structures can drive growth and resilience.
Mashatile challenged the industry to focus on localisation and seize the promise of new technologies. Achieving a 5% boost in local procurement could inject R30 billion into the market for South African suppliers. Even greater potential lies in the emerging field of New Energy Vehicle (NEV) components. The country’s mineral resources and manufacturing expertise position it as a future leader in fuel cell systems, battery production, and advanced thermal management. The global push toward green mobility offers South Africa an unprecedented opportunity to shape the industry’s future, moving beyond traditional roles and becoming a center for technological innovation.
The African Continental Free Trade Area (AfCFTA), launched in 2021, presents an extraordinary opportunity for South Africa’s automotive sector. By reducing trade barriers and harmonizing standards across the continent, AfCFTA enables companies to tap into a vast, unified market. It recalls historical economic integration efforts, such as the creation of the European Union, which turned divided markets into engines of collective growth and innovation.
For the automotive sector, AfCFTA means greater market access, new cross-border partnerships, and the chance to build regional value chains. It promises to transform Africa from a collection of separate markets into a competitive global force. Mashatile encouraged industry leaders to think beyond national borders and embrace the benefits of continental cooperation.
At the heart of all these efforts lies a commitment to transformation. The Automotive Masterplan’s goals for Black industrialist participation and gender equity aim to correct past exclusions and build a more inclusive industry. These initiatives mirror South Africa’s broader transformation strategies, from Black Economic Empowerment to the global movement for stakeholder capitalism. They focus on entrepreneurship, small business development, and education as pathways to uplifting families and communities.
South Africa’s automotive components sector faces a defining moment. Its achievements in manufacturing, export, and job creation have cemented its place in the nation’s economy. However, success cannot breed complacency. The challenges of technological change, global trade tensions, and persistent inequality demand coordinated action and fresh thinking.
Mashatile concluded his message with a call for unity and creativity. He urged business leaders, labor organizations, and policymakers to work together in harnessing technological advances and developing the skills needed for the industry’s next chapter. The Eastern Cape’s factories, training centers, and innovation hubs offer a glimpse of what is possible when collaboration and inclusion guide decision-making.
A new generation of Black industrialists, women leaders, and skilled artisans stands ready to shape the future. By investing in research, embracing green technologies, and prioritizing local development, the sector can build a legacy that honors its past and secures prosperity for all. The road ahead will require determination, adaptability, and an unwavering focus on inclusivity – but the potential for transformation remains as powerful as ever.
South Africa’s automotive components industry is grappling with several significant challenges including:
These obstacles impact not only the industry but also South African families and communities, deepening inequality and unemployment.
Despite challenges, there are promising opportunities including:
The government is actively promoting sector growth through:
The Eastern Cape is a pivotal region for South Africa’s automotive components industry because of:
AfCFTA offers transformative opportunities by:
Inclusivity is a core pillar of the sector’s future, with a focus on:
These efforts align with South Africa’s broader transformation goals and global trends toward stakeholder capitalism, ensuring the industry’s growth benefits all segments of society.
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