Automotive industry in South Africa
While domestic development of trucks and military vehicles exists, cars built under license of foreign brands are the mainstay.
It has motivated global motor vehicle manufacturers to grant production contracts to South African factories.
Companies producing in South Africa can take advantage of the low production costs and the access to new markets as a result of trade agreements with the European Union and the Southern African Development Community.
Large component manufacturers with bases in the country are Arvin Exhaust, Bloxwitch, Corning and Senior Flexonics.
As of July 2024, no vehicles are in full production, with the facility running a skeleton staff, although it plans to fully assemble the Beijing X55 locally, and begin constructing the Foton Tunland G7 from 2027.
[5][6] BMW's Rosslyn Plant in Gauteng was founded in 1968 and plays an important role in the production of equipment used in vehicles.
Daimler-Benz AG acquired 50.1 percent of United Cars and Diesel Distributors in 1984 which became Mercedes-Benz of South Africa.
[19] Automotives first came to South Africa in 1896 when a Benz Velo was imported and it was demonstrated on January 4 of 1897 in Pretoria in front of President Paul Kruger.
The early days of the South African motoring industry were focused on the American brands Ford and Chevrolet.
In the early 1960s Studebaker became VW set up by managers from Ford PE who went on to develop VW- USA for the German company.
The apartheid government asked Ford and GM to advise on policy to develop the local automobile component manufacturing industry.
However between Ford, GM and VW the three largest manufacturers (Ford about 28%, GM about 32% and VW about 15%) they accelerated local component development so rapidly that by 1968 that had destroyed Job Reservation policy in the auto industry allowing black people to work in factories previously reserved for whites.
In 2010 the National Association of Automobile Manufacturers of South Africa (NAAMSA) reported that new vehicle sales exceeded their initial expectations of 7%, with large local growth allowing it to reach 24%, providing a big boost after the 2008/09 recession.
[24] Regulations for local content requirements first appeared in the 1960s and were quite strict, and led to a limited number of cars being available to South African motorists.
Early in the program, models were often sold as "declared manufactured", but the government gradually began enforcing the standards and imposing penalties.
[25] The South African government has provided substantial support for the automotive industry in the past 20 years and is still identifying it as a key growth sector.
Electric vehicles are heavily taxed, making them expensive, and the country's large distances and unreliable power supply lead to range and reliability concerns.
South Africa has multiple options for nurturing its automotive industry and improving productivity through regulation or through investment in automation or through other creative ideas.
