South Africa is preparing to redraw the rules of its automotive economy, with government confirming that a new package of measures to boost local vehicle production will be unveiled by the end of February. The announcement, made to lawmakers, signals an assertive turn by the state as it attempts to revive manufacturing capacity, protect jobs, and reposition the country in an increasingly competitive global car market.
Deputy Minister of Trade, Industry and Competition Zuko Godlimpi said officials are actively examining changes to the luxury vehicle tax while also weighing higher tariffs on imported cars. The intention is clear, to tilt the market in favour of domestic assembly lines and component manufacturers, at a time when imported vehicles continue to dominate showroom floors across the country.
Parliament Frames The Industry As Strategic
The message from Parliament was equally firm. Portfolio Committee Chairperson Mzwandile Masina described the automotive sector as a strategic pillar of the South African economy, one that extends far beyond factories and export terminals. His remarks framed the industry as a potential engine for inclusive growth, especially in communities that have long been excluded from industrial development.
“Plays a critical role” and “presents real opportunities for transformation and the growth of township economies,”
Masina said, arguing that state purchasing power must be used more deliberately. He added that public procurement should be aligned to support domestic vehicle production, improve economies of scale, and deepen the local manufacturing of components, rather than relying on imported inputs.
Jobs Growth And Global Ambition
Beyond short term market protection, the government’s ambition is expansive. The Portfolio Committee has set its sights on doubling automotive employment by 2035, a target that reflects both economic urgency and political pressure in a country battling stubbornly high unemployment. Officials believe that the sector can absorb far more labour if local production volumes rise and supply chains are expanded.
“The key objectives are to ensure South Africa ultimately contributes 1% to global vehicle production, with up to 60% local and 100% employment growth,”
the Department of Trade, Industry and Competition reported. While the targets are bold, they reflect a desire to reverse South Africa’s gradual slide down global manufacturing rankings and reclaim industrial relevance.
A Market Split Between Local And Imported Cars
South Africa’s car market today reflects a complex mix of local assembly and imported dominance. Global brands such as Toyota, Volkswagen, Ford, Isuzu, Suzuki, and Hyundai are widely sold, with some models assembled domestically. Toyota continued to lead sales in 2025, driven by locally built favourites like the Hilux and Corolla Cross, which have become fixtures on South African roads.
At the same time, imported vehicles still account for a substantial share of sales, particularly in the light vehicle segment. Chinese manufacturers such as Chery and GWM, including its Haval range, are rapidly expanding their footprint, intensifying competition for local producers and raising questions about how tariffs and tax reforms might reshape consumer behaviour.
Local Innovation And Manufacturing Reality
Alongside multinational giants, South Africa hosts a small but notable group of specialised local car makers. Birkin Cars produces lightweight Lotus Seven style kit cars, Bailey Cars focuses on race oriented sports vehicles, and in 2025 a new entrant, EVerione, launched electric vehicles with plans for domestic battery production. These firms represent innovation at the margins of the industry, often constrained by scale and capital.
The broader manufacturing picture shows both progress and pressure. Vehicle production rose from about 499,000 units in 2021 to 667,000 in 2024, a recovery that followed pandemic related disruptions. Yet imports continue to command the market, with light vehicles making up roughly 69% of sales in 2025, underscoring the scale of the challenge facing policymakers.
An Industry That Carries The Economy
The automotive sector remains one of South Africa’s most economically significant industries. It supports more than 115,000 direct manufacturing jobs and over 500,000 positions across the wider value chain, from logistics and retail to components and maintenance. Its contribution of around 5.3% to gross domestic product places it among the country’s most important productive sectors.
With new policy measures imminent, the coming months will reveal whether higher tariffs and tax reforms can successfully shift the balance toward local production. What is clear is that government is no longer treating the automotive industry as just another sector, but as a central battleground in the fight for jobs, growth, and industrial renewal.
