The automotive industry is responsible for 60% of the country's manufactured products exported. Scary thought knowing this industry will disappear within the next 7 or 8 years with virtually 0 exports unless they export into Africa.
I was reading an article over the weekend that mentioned South Africa's Automotive Industry masterplan and I had to go and find it. You would be wondering what is so masterful from an industry that is in decline and not surprisingly is missing the masterplan targets by a country mile.
Whenever I see a plan mentioning Black Economic Empowerment as their main objective you just know deep down this is doomed for failure. Everyone loses so forget targeting certain races and ironically the economic empowerment this is supposed to unleash never materializes and the total opposite happens.
The plan to increase BEE businesses supplying the automotive sector achieving 15% black owned businesses has not materialized. A few manufacturers have handed over certain components for OEM manufacture to BEE companies, but this is more to be seen as doing their bit to help. One has to be realistic when this happens and call it for what it is and is not about the business and more about the bigger picture.
Over the last 2 years 14 automotive component companies have shut down and with this over 4000 jobs have been lost for good. The reality is the sales are dropping and instead of paying locally for higher priced components they may as well import every item required for assembly saving the extra costs.
The masterplan set a target of achieving 784 509 vehicles by 2025 which makes me smile as what is wrong with 785 000. How and why they came up with that precise figure tells you either the plan is calculated working over a 12 month period to the exact hour which will never happen and tells you whoever is coming up with these precise figures has never worked a single day in the manufacturing industry.
Not surprisingly the 784 509 figure of cars assembled/manufactured has ever been reached and is highly unlikely to ever be achieved. 2024 saw 599 755 units and 2025 saw less with 554 613. there was a 22.8% drop off in exports in 2024 and we all know there was a huge drop off in 2025 with the new tariffs imposed.
Employment targets of 224K by 2035 (good luck) with current levels around 115K and sales declining so in theory less employees required. Nissan has already packed their bags and left knowing it is far cheaper to import the vehicles than to assembly and export from SA with the US tariffs and carbon Tax coming from the EU.
Chery the Chinese auto maker has taken over the Nissan factory and job losses are expected to be minimal for now unless they have not revealed the entire truth of how automated that plant will be. The Chinese are not stupid enough to rely on local workers who tend to strike a few times every year.
The elephant in the room is something that the masterplan has not really addressed and that is the Electric Vehicle markets. Currently SA is used to manufacture/assembly vehicles for the European markets. Combustion engines are supposedly being discontinued or phased out between 2030 and 2035 and EV''s imported will have a minimum 25% tax/duty applied.
The problem is SA is heavily reliant on coal power stations so every part of the assembly will have an extra carbon footprint cost attached plus the electric railways use the same electricity and may as well use a coal locomotive.
Every part of the countries infrastructure needs tearing down and replacing which is never going to happen. There will be some upgrades, but the majority of what needs to happen would be reliant on the private sector. Until the electricity is generated using renewables the automotive masterplan is a pipe dream and fixing what has been broken by failed government policies. The government allowing cheap foreign imports to wreck the local auto industry is where the real problem lies or was that the masterplan in disguise to replace the legacy brands with the new shiny Chinese brands. Whatever happens the 784 509 auto target is never going to be achieved now or in the future.