South Africa's auto sector hit by job losses and company closures
South Africa, a market long dominated by the likes of Volkswagen, Toyota and Mercedes-Benz , saw sales of 515,850 locally produced cars last year, far below the South Africa Automotive Masterplan 2035 target of 784,509, Minister Parks Tau told delegates at an auto parts conference.
Some 64% of vehicles sold in South Africa are imports. Additionally, localisation - the level of local assembly, labour and components - remains stagnant at 39%, well short of the 60% target, while U.S. tariffs now significantly impact the country's 28.7 billion rand ($1.64 billion) automotive exports, he added.
"These pressures have triggered 12 company closures and over 4,000 job losses in two years," Tau said.
South Africa's automotive industry employs 115,000 people directly, with over 80,000 in component manufacturing alone. Experts say that with the U.S. tariffs on cars and parts that were imposed from April, jobs are under threat as some companies lose contracts in America.
On Tuesday, South Africa submitted a revised offer for a trade deal with Washington, in an effort to lower the 30% tariff U.S. President Donald Trump imposed last week.
To help respond to the challenges the industry is facing, an incentive scheme for local manufacturing now includes electric vehicles and associated components, Tau said.
"Localisation is not merely policy compliance, it is existential. A 5% increase in local content would unlock 30 billion rand in new procurement, dwarfing the 4.4 billion rand U.S. export market," Tau said.
International manufacturers such as Stellantis and China's Chery are looking to localise production in South Africa, with Stellantis ready to break ground in the Eastern Cape province.
(Reporting by Nqobile Dludla; editing by Giles Elgood)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
What's On
an hour ago
- What's On
Dubai Police adds Audi RS7 to its luxury patrol fleet
The Dubai Police already have a pretty impressive collection of patrol vehicles, including limited-edition Alfa Romeos, a Mercedes-AMG GT63, a Lamborghini Aventador and even a futuristic Tesla Cybertruck. And now, they have announced the addition of the Audi RS7 to their luxury patrol fleet. The move reinforces the Dubai Police's commitment to enhancing security and safety around the city by adopting cutting-edge technologies. The unveiling took place at Dubai's iconic Museum of the Future, led by His Excellency Major General Eid Muhammad Thani, Assistant Commander-in-Chief for Criminal Investigation Affairs, alongside Major General Rashid Al Falasi, Director of the General Department of Transport and Rescue. Watch the video below to see how it all went down. The Dubai Police and the senior authorities were joined by representatives from Al Nabooda Automobiles. During the unveiling, Major General Thani was informed about the capabilities of the new Audi RS7 Performance. The car can deliver an impressive 630 horsepower and can accelerate from 0 to 100 km/h in just 3.4 seconds. Not only is it fast, but it is also sure to turn heads as it makes its way down Dubai roads. Speaking on the addition of these fast steel beasts to the Dubai Police fleet, Major General Thani emphasized that integrating high-performance sports cars into Dubai Police's luxury fleet supports the force's goal of strengthening the police presence in key tourist destinations while ensuring that all Dubai Police vehicles remain state-of-the-art. K Rajaram, CEO of Al Nabooda Automobiles also expressed his pride with working with the Dubai Police adding 'With the addition of the Audi RS7 to the fleet, we are proud to support a vision that prioritises high performance and excellence. Together, we are redefining what is possible in mobility and public engagement.' What ya gonna do when they come for you? @dubaipolicehq Images: Dubai Media Office > Sign up for FREE to get exclusive updates that you are interested in
Zawya
an hour ago
- Zawya
Digital Connect Infrastructure & Telecom (DCIT) Chairman Abiola Lukman Lawal becomes Board Member of African Energy Chamber
The African Energy Chamber (AEC) ( the voice of the African energy sector, is proud to announce that Abiola Lukman Lawal, Chairman, Digital Connect Infrastructure&Telecom (DCIT), has been appointed as the newest Board Member of the Chamber. A seasoned executive with over three decades of experience in the oil and gas, infrastructure, telecoms and aviation sectors, Lawal's appointment reaffirms the Chamber's commitment to uniting visionary leaders to drive Africa's energy and infrastructure transformation. Lawal's appointment to the AEC Board follows a major milestone for DCIT, which recently partnered with U.S.-based Vanu Inc. to launch solar-powered mobile network sites in underserved Nigerian communities. This collaboration leverages Vanu's low-power, off-grid systems and DCIT's infrastructure capabilities to deploy scalable, renewable energy-driven connectivity solutions. With proof-of-concept sites now live, plans are underway for expansion across Nigeria and into other African markets – signaling a major leap in energy-tech convergence on the continent. Prior to his leadership at DCIT, Lawal served as Managing Director and CEO of Eterna PLC, where he spearheaded one of Nigeria's most significant downstream energy turnarounds. Under his leadership, Eterna joined a consortium that delivered Nigeria's largest airside aviation fuel depot – the Joint User Hydrant Installation 2 – at Lagos' Murtala Muhammed International Airport. The 15-million-liter capacity facility now stands as a key asset in West Africa's aviation infrastructure. Further accomplishments under his tenure include restoring Eterna to profitability in FY 2024 after a N12 billion loss in 2023; projecting 27% revenue growth; achieving a 166% increase in operating profit in H1 2024; and driving a 117% year-to-date rise in share price – placing Eterna among the Nigerian Exchange's top-performing stocks. Lawal also championed significant investments in LPG and CNG, enabling long-term resilience and diversification in volatile market conditions. Recognized as one of BusinessDay's Top 25 CEOs in Nigeria for 2024, Lawal's strategic leadership continues to bridge traditional and emerging energy sectors. His prior roles include Deputy Managing Director and CFO at Eroton Exploration&Production, Executive Director at Oando Gas&Power and Group Chief Strategy Officer at Oando Plc – where he played a pivotal role in the company's downstream-to-upstream expansion strategy. 'The African Energy Industry is honored to welcome Abiola Lukman Lawal to our Board of Directors. He knows how to turnaround companies with his vary data driven and pragmatic leadership approach. His ability to connect infrastructure development, energy innovation and commercial strategy across both the public and private sectors makes him an invaluable addition to our leadership. Lawal's appointment comes at a critical time as we accelerate investment, technology deployment and inclusive growth across Africa's energy value chain,' states NJ Ayuk, Executive Chairman, AEC. As a Board Member, Lawal will support the Chamber's mission to foster a results-oriented business environment and promote private sector-led energy development across Africa. His leadership will be instrumental in driving cross-border collaboration, advancing infrastructure-led growth and helping to make energy poverty history across the continent. Distributed by APO Group on behalf of African Energy Chamber.
Zawya
3 hours ago
- Zawya
South Africa auto parts group Jendamark braces for US tariff hit
South African auto parts manufacturer Jendamark Automation stands to lose R750m ($43m) of contracts in a US market it has built up to account for 50% of its exports, its operations director told Reuters. Jendamark automation engineer works on an automotive component for a vehicle to be exported, at Nelson Mandela University in Gqeberha, as the annual South African vehicle component manufacturers conference takes place, with a particular focus on how the industry is adapting to U.S. tariffs, in Gqeberha, Eastern Cape province, South Africa, 13 August 2025. Reuters /Shafiek Tassiem The 40-year-old company based in coastal city Gqeberha builds automated assembly lines for catalytic converters, engines and axles for automotive customers such as BMW and Mercedes-Benz among others. But like global automakers and suppliers far and wide, they have been hit hard by US tariffs. "As it stands now, we've got about R750m of deals with our American customers that (we're) at risk of losing," Siegfried Lokotsch said. "I don't know if they're going to still buy the lines from us. We thought we were going to get the orders, we were in a good position ... In my mind, they're gone (the contracts) because they've (the tariffs) just gone up." About 85% of Jendamark's business in South Africa is for export, with 50% of that to the US, where it also has an office. Jendamark is looking for new contracts in other markets, such as Saudi Arabia, but the company has its work cut out to replace the US business it expects to lose. "To find a new market and to understand how they operate in the country and where the opportunities are is not something that just happens overnight," he said.
