Deputy Minister Zuko Godlimpi notes that the automotive industry has faced a number of disruptions since the adoption and implementation of the Automotive Masterplan since 2021. These include COVID-19, the Ukraine-Russia War and the global shift to electric vehicles. However, he highlights that the industry has shown recovery from the COVID impact.
The Department of Trade, Industry and Competition (the dtic) has in the past few years published the EV White Paper and implemented shop-floor competitiveness interventions in partnership with the Japanese government.
A comprehensive South African automotive policy review is currently being carried out to deal with challenges plaguing the sector to revatilise and ensure its rapid growth.
This is according to the Chief Director: Automotives, at the Department of Trade, Industry and Competition (the dtic), Mr Mkhululi Mlota. He delivered a presentation to the Portfolio Committee on Trade and Industry, to give an update in the implementation of the Automotive Sector Masterplan. Mlota said the review will also include Intergovernmental engagements on Tax matters which will commence soon.
In the same session, Dr Tebogo Makube, Acting Deputy Director General: Sectors Branch, indicated that a suite of proposals aimed at reviving the sector are being considered. These include reviewing the customs tariff structure, developing a battery manufacturing policy, attracting new vehicle manufacturers and reviewing the ad valorem tax on light motor vehicles.
The overarching vision of the Masterplan is to create a globally competitive and transformed industry that actively contributes to the sustainable development of South Africa’s productive economy, creating prosperity for industry stakeholders and broader society.
Some of the key objectives are to ensure South Africa ultimately contributes 1% to global vehicle production, with up to 60% local and 100% employment growth.
Mlota told parliamentarians that there are new challenges that the sector has had to contend with and the area of exports is one of the important ones.
“The United States is South Africa’s third largest automotive export destination, withR28.7 billion in exports recorded in 2024. New US tariff measures and uncertainty
regarding AGOA eligibility for the possible 2028 extension threaten the country’s export position. These risks extend across the value chain, from component manufacturers to OEM export programmes. The rise of China as a competitive producer of high tech but more affordable vehicles is also leading to intensifying competition for South African produced vehicles in export markets,” he said.
Mlota also highlighted that the implementation of the White Paper on Electric Vehicles (EVs) is currently continuing while the Localisation of EV Battery Manufacturing Policy Framework is being finalised with the first draft due next month.
The South African government, has been working with various stakeholders to develop and implement sector-specific Masterplans as a significant instrument to promote inclusive economic growth and tackle unemployment. They are action-oriented policy implementation documents targeted towards boosting local jobs and developing local value chains.
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Issued by: The Department of Trade, Industry and Competition (the dtic)
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