Early signs of the effectiveness of government motor industry policy are positive, trade, industry & competition minister Ebrahim Patel says.
Increased employment and record vehicle exports were a sign that the SA automotive master plan, launched in 2021, was pushing the industry in the right direction.
Patel was speaking at the Isuzu vehicle assembly plant in Gqeberha after a meeting with union officials and representatives of vehicle and components manufacturers overseeing the progress of the master plan, which runs to 2035.
He said: “We have reached the highest levels of exports ever and the highest number of jobs the sector has ever had. We have the highest level of bakkies made in SA in the last 10 years. We sold close to 50,000 additional bakkies in 2023 compared to five years ago.
“We have seen more than 6,000 additional jobs in the sector through a combination of the car assembly plants and the component manufacturers. It is an example of successful industrial policy.”
Challenges, however, are mounting. The domestic new-vehicle market has been declining for some years. After record export earnings in 2023, vehicle exports have slowed this year.
Industry association Naamsa said on Tuesday that by the end of March, 137,493 vehicles had been built in SA — 2.29% fewer than in the previous corresponding period.
One aim of the master plan, and its associated automotive production and development programme, is for SA to build 1% of the world’s vehicles by 2035.
SA’s share is less than 0.7%. Other targets include more than doubling vehicle production from the 2019 level of about 600,000 to 1.4-million over the same period, and increasing the value of local components in SA-made vehicles from less than 40% to 60%.
Analysts say these are ambitious targets. Many people in the motor industry consider the 1.4-million production target unattainable. Nevertheless, with 633,000 vehicles built last year and 116,000 jobs in vehicle and components manufacturing, Patel said the industry was a success story.
He was also proud of deepening black local participation through the master plan.
He said the opening of African trade opportunities through the continent’s fledgling free trade area agreement was another positive aspect for the SA motor industry.
“We were able to get agreements on rules of origin for some products, particularly minibuses made in SA, and we are continuing to engage with other African countries to get rules of origin agreed on all other vehicles.”
Rules of origin are criteria that determine the national source of a product which would allows it to move duty-free, or at reduced rates, through trade areas.
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