Ford’s confirmation, late last week, that it was considering hundreds of job losses at its SA operations coincided with the US brand’s decision to skip the country’s biggest annual motoring event.
To be fair, Ford wasn’t the only major name to bypass the three-day Festival of Motoring at the Kyalami racetrack in Midrand. A number of other local manufacturers, and some well-known imported brands, also stayed away, figuring the cost of participation outweighed the marketing benefits.
One group was out in force, however. Chinese importers used Thursday’s media day to launch an array of new vehicles, and the three subsequent public days to dazzle local consumers with their products. Mahindra and Tata flew the Indian flag just as proudly.
Chinese brands are launching a concerted assault on the SA new-vehicle market. Last year, they accounted for 9% of sales. So far in 2025, that share has risen to 13%. India, though, remains the main source of imported vehicles, partly because many of the cars sold here by companies like Toyota and Volkswagen are sourced from low-cost Indian assembly plants.
Trade, industry and competition minister Parks Tau recently said imports make up 64% of cars sold in SA. That affects demand for vehicles made locally, as does diminishing export demand. This, in turn, reduces demand for SA-made assembly-line components.
Industry association Naamsa, in its latest quarterly assessment of market conditions, reported that between April and June this year, capacity utilisation (percentage use of assembly capacity) among local manufacturers of light commercial vehicles — bakkies and minibuses — fell to 63.5% from 72.8% in the first quarter.
The average for the whole of 2024 was 74.4%. Ford Southern Africa’s Silverton, Tshwane vehicle assembly plant builds only Ranger bakkies. After a R16bn investment to manufacture the latest model from 2022, it has annual capacity to build 200,000 vehicles. Most production is exported, mainly to Europe.
Why This Matters
Job losses, rising imports, and shrinking exports are squeezing South Africa’s auto industry. Without urgent action, local manufacturers and their workers face mounting pressure as global competition and trade barriers reshape the market.
Last Thursday, the Solidarity trade union revealed Ford had informed it of plans to shed at least 470 jobs — 391 assembly-line operators at Silverton, 73 at the company’s Eastern Cape engine plant in Gqeberha, and 10 people in administration.
Ford responded these “necessary adjustments” were “part of our ongoing efforts to optimise production and respond to evolving market demands”.
Ford isn’t the only bakkie producer feeling the pinch. The SA assembly plants of Nissan and Isuzu are both operating well below designed capacity. Some Chinese companies have inquired about using that spare capacity to build their vehicles.
Car production is looking healthier. Average industry capacity utilisation in the second quarter of this year was 89%. However, there was a significant difference between individual companies’ performance. The highest average was 100% and the lowest 68.7%.
In 2024, despite an industry-wide average of 90.4%, Mercedes-Benz SA was forced to lay off hundreds of assembly-line workers and cut production by one-third, from three daily shifts to two, because of reduced global demand.
In 2025, it is the SA company most affected by the US imposition of 25% tariffs on imported vehicles.
Naamsa said reduced industry-wide vehicle production in the second quarter reflected “the impact of supply-chain disruptions, domestic market affordability dynamics (meaning competition from cheap imports) and an uncertain export environment”.
Vehicle exports to the US fell by 87% in the second quarter, compared to the same period in 2024, after the imposition of 25% tariffs by that country at the beginning of April. It remains to be seen what will be the impact of Friday’s US appeals court decision upholding a lower court’s view that President Donald Trump’s imposition of blanket tariffs is illegal. The tariffs will remain in place while the Trump administration takes its appeal to the Supreme Court.
As things stand, Naamsa executive Tshetlhe Litheko said the tariffs “could hinder (SA) competitive strategies, delay capital investments, distort long-term planning and increase short-term operational viability”.
Government advice that companies should find alternative markets for their automotive exports ignored the fact that other countries were doing the same.
He said: “For SA, the primary impact relates to the loss of about 25,000 vehicles a year to the US. The secondary impact of increased competition for the bulk of vehicle exports to other markets could potentially pose an even bigger risk as every other country is in a similar position and will be pursuing alternative export markets.”
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.