Deputy trade minister Zuko Godlimpi says South Africa is open to Chinese car manufacturers increasing their footprint in the local car market as it navigates the sector to growth that is in line with the government’s auto sector masterplan.
Speaking to the portfolio committee on trade, industry, and competition in parliament on Tuesday morning, Godlimpi said the implementation of the Auto Master Plan came after the Covid-19 pandemic, the Russia-Ukraine war and the proliferation of new energy vehicles.
EFF MP Sinawo Thambo took issue with the characterisation of India and China’s presence in the SA car market as “dumping”, and asked the deputy minister if the government would consider the two countries as strategic partners to grow the local car sector.
“The language of dumping is the WTO [World Trade Organisation] terminology on dumping. I know you are thinking of it in the political tone, but that’s not it. The department makes the point that we are engaging the Chinese. You can’t do that in a hostile setting,” said Godlimpi.
“We work very well with the Chinese car manufacturers and are trying to make the case that more of them should come to the local market.”
The parliamentary meeting comes after Nissan announced it would discontinue operations at its Rosslyn plant and would commence discussions with Chery SA about transferring the plant.
If we are retained within Agoa, it makes our lives a bit easier. But it doesn’t mean we are not doing scenario planning in preparation for the event we are excluded from Agoa
— Zuko Godlimpi, deputy trade minister
Godlimpi said the government did not want any manufacturers to leave the SA market, regardless of which region they came from.
“You want to be careful not to shout before you get out of the forest. There is a lot, including the difficulties we are having with the EU. As we renegotiate our terms of engagement with the EU, we are paying attention to those dynamics.”
He said if India was invited to build a plant, they would naturally respond to say their investment seeks to resolve certain economic challenges in the Indian market. He said Chery’s interest in the SA market was a sign of the growing footprint of Chinese car manufacturers in SA.
The Auto Sector Master Plan is being implemented as SA continues to grapple with unilateral tariffs from the US and an ongoing trade rift, which could result in SA being excluded from the soon-to-be-extended African Growth and Opportunity Act (Agoa). Godlimpi said these tensions may endure beyond the term of US President Donald Trump.
“The idea that you wait for 2028 and suddenly everything goes back to what it was is a naïve proposition. Some analyses project that trend but as a strategy we expect things to more or less stay the same.”
He said the EU’s proposition that SA should transition away from internal-combustion vehicles and other carbon-intensive exports faster, as outlined in the Carbon Border Adjustment Mechanism, is a bigger threat to the local market.
“If we are retained within Agoa, it makes our lives a bit easier. But it doesn’t mean we are not doing scenario planning in preparation for the event we are excluded from Agoa.”
The department acknowledged that while the master plan envisions SA commanding 1% of the global output in the sector, with a projected target of 1.4-million units annually by 2035, the local sector only cleared the 600,000 benchmark in 2023, 2019, 2018 and 2015 in the past decade.
“[Our vision is the] achievement of a globally competitive and transformed industry that contributes to the sustainable development of South Africa’s productive economy, creating prosperity for industry stakeholders and broader society,” a written submission from the department said.
“[Our key objective is to] support investments to propel growth and create jobs in the domestic economy. [Our achievements include] a total of about R68.1bn [in investment since 2019.”
In a statement released on Friday, minister Parks Tau welcomed the announcement of the investment by Chery South Africa in the automotive sector after an agreement signed between Chery SA and Nissan South Africa to acquire the assets in Nissan’s Pretoria facility.
“The announcement comes as the department of trade, industry and competition continues its engagement with the industry to revamp the automotive policy and support measures. This acquisition by Chery SA is subject to regulatory approvals, after which details on the investment will be shared with the public,” he said.
“The South African automotive sector remains a key anchor industry for manufacturing and job creation. The minister welcomes the commitment by Chery SA to continue working with the department during the implementation phase of the process.”
TimesLIVE
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