The Automotive Industry Transformation Fund (AITF), established in 2020 to drive equity and growth in South Africa’s automotive sector, has appointed Isuzu SA CEO Billy Tom as its new chair, succeeding independent chair Dr Sizeka Magwentshu-Rensburg.
The fund, backed by major manufacturers including BMW, Ford, Isuzu, Mercedes-Benz, Nissan, Toyota, and Volkswagen, operates as a collective Equity Equivalent Investment Programme (EEIP) under BBBEE codes. Each contributing firm allocates a portion of annual earnings to foster black-owned automotive enterprises through funding, market access, and mentorship.
Billy Tom
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Under Tom’s leadership, the AITF has transitioned to a rotational chair system, enabling OEM executives to leverage industry expertise directly. Since its inception with an initial R596-million investment, the fund has supported 70 black-owned companies — surpassing its 2029 target of 90 — and facilitated R5-billion in market access. A further R1-billionn has been earmarked to develop tier 2 and 3 black-owned suppliers, alongside R500-million reserved for new energy vehicle (NEV) infrastructure, despite hybrids dominating 85% of the niche 3% NEV market share.
Tom highlighted challenges such as inefficiencies at South African ports, where logistical bottlenecks and security issues disrupt supply chains. These hurdles have intensified the push for localising components, a strategy reinforced by pandemic-era lessons. He cited a success story where a black female-owned supplier, initially providing R40-million in parts to Isuzu, secured R200m in contracts after AITF and Industrial Development Corporation support.
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However, external pressures loom. US tariffs on automotive imports, introduced under former President Donald Trump, threaten South Africa’s R35-billion annual vehicle exports to the US — its third-largest market.
Trade, Industry, and Competition Minister Parks Tau confirmed the government is considering expanding the Automotive Production and Development Programme (APDP), which offers production-linked incentives, to mitigate tariff impacts. Naamsa, representing local OEMs, warned the 25% levy could raise costs for US consumers and reduce export viability for brands like BMW and Ford.
Amid these headwinds, Tom advocates bolstering intra-African trade, referencing Algeria’s shift from importing 23 000 South African vehicles in 2011 to pursuing local production via partnerships with 13 international firms, including Hyundai and China’s Great Wall Motor. Algeria’s import ban and push for 500 component factories mirror broader continental strategies to enhance self-reliance.
Tom emphasised Africa’s need to “bulletproof” itself against global disruptions, drawing parallels to vaccine inequity during the pandemic. While acknowledging progress, he noted the AITF’s journey was far from complete, balancing ambition with systemic challenges.
As South Africa navigates trade uncertainties and infrastructural reforms, the fund remains pivotal in shaping an inclusive, resilient automotive future.
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