Trade, Industry and Competition Minister Parks Tau used the opening of the Ministerial Automotive Transformation Day in Durban on 13 October to press carmakers and suppliers for deeper auto localisation, meaning more vehicles and parts made in South Africa, and to open that supply chain to black-owned, women-owned and youth-owned firms, according to What’s On G and The Witness.
The occasion was South African Auto Week, now in its fifth edition, which runs from 13 to 16 October at the Durban International Convention Centre. Business Explainer reports that it is led by naamsa, the Automotive Business Council, together with the KwaZulu-Natal government and the Department of Trade, Industry and Competition (the dtic).
What the minister said
Tau tied transformation to competitiveness. “Transformation and competitiveness are not in tension,” he said, as quoted by What’s On G. The Witness records him saying: “An industry that draws on all of its people, and on a broad and capable supplier base, is a stronger industry.”
On localisation, he said: “Every imported component that we learn to make here is an opportunity for a new supplier, a new investment and new jobs.” He also asked the industry for measurable commitments to report back on at next year’s event: “We do not need more statements of good intent.”
The minister pointed to new energy vehicles (NEVs, which cover electric and hybrid models) as a chance to widen participation. The value chains he named were batteries, electric drive units, power electronics and charging equipment. Business Explainer reports that he said black-owned and women-owned firms can enter these chains “as owners and partners, rather than at the margins.”
Incentives under review
Tau said the Automotive Production and Development Programme 2 (APDP2), the incentive programme for the sector, is under review. Business Explainer quotes him saying it “must reward manufacturing in South Africa, not assembly alone, and must support component manufacturers.”
- A 150% investment allowance applies to qualifying electric and hydrogen vehicle production, as reported by Business Explainer and What’s On G.
- The Automotive Investment Scheme, the Industrial Development Corporation and the National Empowerment Fund will continue to back local suppliers, according to Business Explainer.
In an analysis piece, Daily Maverick reports draft APDP2 amendments that would let critical minerals from the Southern African Development Community and the Southern African Customs Union count towards local content for electric vehicle batteries, and would require beneficiaries to be B-BBEE compliant or contribute to the Automotive Industry Transformation Fund (AITF). This article has not seen the draft text, so those terms are Daily Maverick’s account and not a confirmed dtic position.
The numbers behind the push
What’s On G, citing naamsa and Daily Maverick, puts vehicle and component exports at R291 billion in 2025, or 15.6% of total exports, with about 113,000 people directly employed. Original equipment manufacturers (the carmakers) imported about R151 billion in components. The local content value rose from R57.2 billion in 2020 to R126.8 billion in 2025, yet the average local content share stayed near 39.7%, against a target of 60% by 2035 in the Automotive Masterplan.
Other sources give a slightly lower share. In a July opinion piece in Business Day, Renai Moothilal, chief executive of the component makers’ body Naacam, wrote that average local content is just above 38%, roughly where it was a decade ago. That is one industry leader’s view, not a neutral finding.
Moothilal also wrote that the component sector lost more than 7,500 jobs and saw 13 plants close over three years. Tau acknowledged on the day that some component makers, black-owned and otherwise, have shut under pressure from imports, energy and logistics costs, and weaker demand, according to The Witness.
Who owns the supply chain
What’s On G reports that most vehicle manufacturers and Tier 1 suppliers (those selling directly to carmakers) are foreign-owned, and that Tier 1 firms import about 86.5% of what they buy. It also reports that black-owned projects received about R227 million, roughly 1%, from the Automotive Investment Scheme, according to figures Tau gave at the 2024 edition.
The AITF was set up by manufacturers to let global carmakers meet black ownership requirements through local investment instead of selling equity. Its corporate planner, Princess Mashamahite, says close to R1 billion in cash has unlocked about R8 billion in market access, according to What’s On G. That figure is the fund’s own claim.
Sales are strong, exports are not
Figures from naamsa, reported by Cars.co.za, show domestic new-vehicle sales of 61,645 units in September, up 12.7% on a year earlier and the 24th straight month of annual growth. Exports were 31,473 units, down 18.8%, or 7,309 vehicles.
What happens next
The conference continues to 16 October, and the KwaZulu-Natal Investment Conference is part of the programme on 15 October. No date has been given for the final APDP2 changes. The industry’s measurable transformation commitments are due at next year’s South African Auto Week.
