Low demand for locally made cars, rising vehicle imports, and slow progress in boosting local content have led to 12 company closures and more than 4,000 job losses in South Africa’s auto industry over the past two years, Trade Minister Parks Tau said.
The sector employs 115,000 people directly, including more than 80,000 in component manufacturing.
Last year, South Africa produced 515,850 vehicles, well below the South Africa Automotive Masterplan 2035 target of 784,509, Reuters reported.
Imports account for 64% of vehicles sold, while localization, measured by the share of locally assembled parts and labour, remains stuck at 39%, far from the 60% goal.
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Exports have also taken a severe hit. Vehicle shipments to the U.S. fell 73 in the first quarter of 2025 and dropped further by 80% in April and 85% in May, according to industry data.
The declines follow the introduction of a 30% U.S. tariff on cars and parts in April, which has hit South Africa’s 28.7 billion rand ($1.64 billion) automotive export market. Some manufacturers have already lost contracts with American buyers, Tau said.
“Localisation is not merely policy compliance, it is existential. A 5% increase in local content would unlock 30 billion rand in new procurement, dwarfing the 4.4 billion rand U.S. export market,” Tau added.
Despite the challenges, global automakers are still expanding local operations.
Stellantis plans to break ground on a new facility in the Eastern Cape, while China’s Chery is ramping up local production.
Chinese carmaker BYD has also expanded its presence in South Africa with the launch of three new vehicle models.
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Image Credit: Reuters
