JOHANNESBURG – Minister of Trade , Industry, and Competition Parks Tau has emphasized that collaboration between government, industry stakeholders, and international partners is critical to overcoming the growing pressures on South Africa’s automotive sector. Tau calls for collaboration at a time when the industry faces serious threats from global trade dynamics, dwindling local production, and rising unemployment.
Tau made his remarks at a high-level industry conference hosted by the National Association of Automotive Component and Allied Manufacturers (NAACAM) in the Eastern Cape on Wednesday. His address focused on urgent challenges impacting the sector, including punitive U.S. tariffs, declining domestic sales, and the broader impact on the country’s economic stability.
The automotive sector is a cornerstone of South Africa’s manufacturing base and a key contributor to GDP. But in 2024, the number of locally produced vehicles dropped to just over 500,000 units — well short of the 700,000-unit target set by the South African Automotive Masterplan 2035. Tau warned that without immediate strategic alignment and partnerships, the gap will continue to widen, jeopardizing thousands of jobs and billions in export revenue.
“Tau Calls for Collaboration” Amid Mounting Challenges Facing Automotive Sector
Tau’s call to action comes on the heels of a major international development: the introduction of punitive tariffs by the United States on South African automotive exports. These measures could place over R28.7 billion worth of trade at risk, significantly disrupting export-driven manufacturing operations.
“The punitive tariffs from the US are not just a geopolitical concern. They are a direct threat to our production lines, our workforce, and our trade surplus in the automotive value chain,” Tau said.
The tariffs, combined with weak domestic demand and a rising preference for imported vehicles, have already begun to take a toll. Today, more than 60% of vehicles sold in South Africa are imports, a trend that undermines local production capacity and suppresses potential growth for domestic component manufacturers.
According to Tau, the growing strain on the automotive sector has led to the closure of 12 companies and the loss of over 4,000 jobs in just the last two years. These figures highlight a deeper structural problem that can only be addressed through focused collaboration between the public and private sectors.
“Localisation is not merely about policy compliance — it’s existential for the survival and competitiveness of our automotive sector,” Tau stressed. “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.”
This carrot, Tau explained, comes in the form of incentivizing investment, scaling up production, and enhancing the value-add of locally manufactured automotive components.
In reinforcing the theme of “Tau calls for collaboration”, the minister cited the successful partnership between NAACAM and the Tshwane Automotive Special Economic Zone (SEZ). This initiative, designed to foster supplier development and improve skills training, serves as a model for how government and industry can work hand in hand.
“The partnership with the Tshwane SEZ is evidence that collaboration works. It boosts supplier growth, strengthens our value chain, and enhances global competitiveness. It’s a model we should replicate in other provinces,” Tau said.
He added that expanding similar initiatives across other regions could unlock new employment opportunities and position South Africa as a globally competitive manufacturing hub — particularly for electric and hybrid vehicles, a market expected to explode over the next decade.
Tau’s message was clear: collaboration is no longer optional — it’s imperative. The automotive industry’s challenges are interconnected, involving everything from international trade policy to local infrastructure and workforce development. No single stakeholder can solve these issues in isolation.
Industry analysts agree that unless key players align their efforts, the country could see further erosion in manufacturing output, greater dependency on imports, and the continued loss of industrial jobs.
“The automotive sector is too important to fail,” Tau concluded. “We must stand together — government, industry, labor, and our global partners — to protect and grow this vital part of our economy.”
As the conference drew to a close, the theme “Tau calls for collaboration” resonated strongly among delegates, many of whom echoed the minister’s concerns and pledged to engage in deeper partnerships moving forward.
Source- EWN
