Tau calls for collaboration to address multiple challenges facing automotive industry

JOHANNESBURG - Minister of Trade and Industry Parks Tau has called for collaboration to address multiple challenges facing the automotive sector.

Tau made the calls at a conference hosted by the National Association of Automotive Component and Allied Manufacturers in the Eastern Cape on Wednesday.

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The punitive United States (US) tariffs are the latest speed bump for the automotive sector, threatening to slow growth, which will impact the country’s economy.

Domestic sales of locally produced vehicles plummeted to half a million units in 2024 – far below the South African Automotive Masterplan 2035 target of 700,000.

More than 60% of vehicles sold here are imports, eroding local production scales.

Adding to this, the US tariffs are expected to significantly impact South Africa’s R28.7 billion automotive exports.

Tau said these pressures had triggered 12 company closures and over 4,000 job losses in two years.

"Localisation is not merely policy compliance, it is existential. We want to grow the sector, so our first option must not be to wield a stick, but rather offer a carrot to these companies to attract more investment into the country, thereby increasing the value-add of particularly our component manufacturers."

He said the National Association of Automotive Component and Allied Manufacturers' partnership with the Tshwane Automotive Special Economic Zone to boost supplier growth and skills was a model to replicate.