Industry leaders and policymakers converged in Gqeberha last week seeking solutions for myriad challenges facing the SA auto components manufacturing industry.
The National Association of Automotive Component and Allied Manufacturers (Naacam) 2025 Show tabled looming plant closures, geopolitical issues affecting the viability of exports, increasing competition from imports eroding domestically-produced vehicle sales and ongoing uncertainty related to energy and logistics parastatals.
Sowetan Motoring attended the two-day show, which saw as many as 150 exhibitors lining the halls, in addition to a packed roster of panel discussions.
From filters to rubber fittings, plastic trims, metal frames, paint, electronics and glass – the sector spans an exhaustive breadth of suppliers, accounting for 80,000 direct jobs.
According to Naacam CEO Renail Moothilal, components worth more than R63.4bn were exported from SA in 2024, contributing 5.25% to GDP and accounting for 22.6% of total manufacturing output.
The sector is behind on certain ambitions guided by the SA Automotive Master Plan (Saam), which aims for 60% local content by 2035, increasing sector employment to 224,000 jobs and ensuring at least 25% of the supplier base at tier 2 and tier 3 levels are made up by black-owned businesses.
Jabulani Selumane, CEO of the Automotive Industry Transformation Fund (AITF) said more than 2,700 jobs had been created and 70 businesses funded since the entity began in 2021.
The move to host the 2025 show in Nelson Mandela Bay was said to be a strategic decision.
Thabo Shenxane, CEO of the Eastern Cape's Automotive Industry Development Centre (AIDC); noted that the province hosts 45% of SA's component suppliers.
Signifying the extent of the industry's woes was the recent wind-down announcement of Goodyear's tyre manufacturing facility in Kariega. ArcelorMittal's closure of steel operations in Newcastle and Vereeniging imposed further constraints to the supply of raw materials required for auto manufacturing.
The tally of closed businesses identified by Naacam is 12, anticipated to have affected 4,000 employees across the supply chain.
On potential investment from Chinese manufacturers, the AIDC's Shenxane said enforced localisation, creation of jobs and development of skills would be non-negotiables for any foreign investor eyeing the local space.
US president Donald Trump's 30% tariff regime was a recurring talking point, threatening the decimation of exports.
Among companies threatened by the tariffs is assembly lines builder Jendamark Automation facing the loss of as much R750m in business.
The tariff structure cast a light on the need for increased vigour in unlocking the potential of the 2018 African Continental Free Trade Area (AfCFTA) agreement, aimed at boosting trade, investment and job creation through a sustainable supply chain across the continent.
Industry captains from automakers with local manufacturing plants shared perspectives.
Peter van Binsbergen, CEO of BMW SA, said the move to produce the plug-in hybrid electric vehicle (PHEV) version of the X3 SUV was a result of forward-thinking strategies – and plain good fortune.
The brand's Rosslyn, Tshwane plant is the exclusive producer of the X3 PHEV worldwide, on the back of a R4.2bn investment in upgrading the facility, which has been active since 1973.
“The world has switched to hybrids over the last two years, so we have seen an unexpected demand,” he said.
This example echoed views from Naacam's Moothilal that significant opportunities for localisation exist in the new energy vehicle (NEV) manufacturing space, beneficiating SA and its regional endowment in mineral resources.
Toyota SA's CEO Andrew Kirby said industrialisation remains the most reliable pathway the country's long-term prosperity. “SA has not lost its manufacturing base, but we have not expanded or deepened it,” he said.
In a separate discussion, general secretary of the National Union of Metalworkers of South Africa (Numsa) Irvin Jim said industry regulations needed review in order to stimulate the market, including revisiting factors such as high ad valorem tax on new vehicles.
Government officials pledged to support the sector.
Minister of trade and industry Parks Tau said reforms to the Automotive Production Development Programme Phase 2 (APDP2) regulations would include an incentive structure that shifted duty credits to reward manufacturing, instead of assembly credits.
He mentioned the 150% capital allowance to incentivise NEV and hydrogen vehicle production, introduced with the Taxation Laws Amendment Act, gazetted in December 2024. This covers assets such as buildings, plants and equipment brought into use between March 1 2026 and March 2036.
Tau forecast a 5% increase in local content would unlock R30bn in new procurement, easing the prospect of losing the R4.4bn US export market.
Eastern Cape premier Oscar Mabuyane punted a rollout of Eskom energy security investments in the province costing R2.5bn, between 2025 and 2030, potentially yielding reliable power supply to service industries.
Transnet's planned Ukuvuselela project could see a high-capacity vehicle freight corridor between Gauteng and Eastern Cape by 2028, able to support transfer of 150,000 units.
Deputy president Paul Mashatile delivered the keynote address on the final day of the show, leading with an announcement that the adoption of a new trade proposal to the US could relieve tariff-related pressures on the automotive manufacturing sector.
He said the scheme could settle the 30% tariff, with a ripple effect for as many as 130 other trading partners, possibly rerouting products into the South African market.
Mashatile highlighted that failure to reach an amicable trade agreement with the White House would result in repercussions throughout the value chain.
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