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The Portfolio Committee on Trade, Industry and Competition has called for deeper localisation, job creation and meaningful transformation in South Africa’s automotive industry, as it assessed progress on the South African Automotive Industry Master Plan 2035.
 
The committee met with the Department of Trade, Industry and Competition (DTIC), its entities and key automotive industry stakeholders yesterday, to evaluate how far the Master Plan has gone in strengthening the automotive value chain and growing the local economy.
 
The Automotive Industry Master Plan 2035 aims to expand the industry by increasing local content, improving global competitiveness, deepening value addition, and transforming ownership and participation across the value chain. A key goal of the plan is to double employment in the automotive sector by 2035.
 
During the engagement, the DTIC and industry stakeholders reported that vehicle production, employment and exports have recovered to pre-COVID-19 levels. However, they cautioned that performance remains well below the targets set in the Plan. Of particular concern was the fact that local content levels remain stagnant at around 40%, limiting the industry’s ability to create more jobs and grow domestic suppliers.
 
In response, the DTIC indicated that it is reviewing automotive policies to ensure stronger and more effective interventions. These include addressing challenges such as competition from cheaper vehicle imports, ongoing global economic uncertainty, and the global transition from internal combustion engines to electric vehicles. The policy review also seeks to accelerate localisation and transformation across the industry.
 
Industry stakeholders stressed the urgent need to restructure tax and incentive systems to promote domestic vehicle production and sales. They argued that the current system allows independent importers and semi-knocked down (SKD) kit assemblers to bring vehicles into the country at much lower costs, with limited multiplier effects for the local economy. This, they said, suppresses demand for locally manufactured vehicles and threatens jobs across the value chain.
 
Stakeholders further called on government to make stronger use of local public procurement policies, particularly in public fleet management, to support domestic vehicle manufacturers. They emphasised that incorporating black entrepreneurs and service providers into public fleet systems would help grow the local value chain, create jobs and deepen transformation.
 
Chairperson of the committee, Mr Mzwandile Masina, emphasised the strategic importance of the automotive industry to South Africa’s economy.
 
He said: “The automotive industry plays a critical role in our economy and presents real opportunities for transformation and the growth of township economies. Local public procurement must be leveraged to support domestic vehicle production, improve economies of scale and expand the range of components produced locally.”
 
Mr Masina noted that many of the challenges raised by industry stakeholders cut across the mandates of the DTIC, National Treasury and the Department of Transport. The committee will compile a report which will be submitted to the National Assembly and make recommendations to the Minister of the DTIC, informed by the inputs received during the engagement.

Issued by the Parliamentary Communication Services on behalf of the Chairperson of the Portfolio Committee on Trade, Industry and Competition, Mzwandile Masina