South Africa's Automotive Industry: Challenges and Opportunities Ahead

GQEBERHA – The South African automotive industry, a cornerstone of the nation’s manufacturing landscape, gathered this week to celebrate a significant milestone while charting a deliberate course through a period of global transition.

At the fourth South African Auto Week, naamsa: The Automotive Business Council commemorated its 90th anniversary, reflecting on a legacy of partnership and looking ahead to the challenges and opportunities presented by the global shift to new energy vehicles.

The acting Premier, Mlungisi Mvoko, also serving as the event’s ambassador, opened the proceedings by acknowledging the vital role of media collaboration and the growth of the gathering itself. The event served as a platform to recognise naamsa’s nine-decade journey, which began in this very city before its offices moved to Pretoria in 1983.

The association was lauded for its consistent work in shaping policy, driving innovation, and integrating the domestic industry into international value chains. Today, representing 56 brands, naamsa continues to operate on the principles of free enterprise and collective advancement for its members.

The annual industry report presented a picture of a sector demonstrating resilience amid headwinds. For the first time since the pandemic-related disruptions of 2020, the sector experienced a modest contraction in 2024. The total export value of vehicles and automotive components saw a decrease of R 2-billion, settling at R 268,8-billion, down from the previous year’s record of R 270,8-billion.

Despite this dip, automotive exports still constituted a substantial 40,7% of South Africa’s total merchandise exports for the year. In terms of volume, vehicle exports declined to 390 844 units from 399 809 units in 2023.

A notable bright spot emerged in the components sector, where export value increased from R 203,9 billion in 2023 to a record R 25,4-billion in 2024, a shift attributed to a changing mix of vehicles being exported. The industry also successfully expanded its global footprint, now sending products to 155 countries, up from 148 in 2023, with export value more than doubling to 39 of those nations.

The automotive sector’s role as a primary driver of South Africa’s manufacturing output remains undisputed. In 2024, vehicle and component manufacturing contributed 2,6% to the domestic manufacturing output, with the broader automotive industry contributing 5,2% to the national GDP. Investments from original equipment manufacturers and their suppliers amounted to R 10,25-billion.

A long-term perspective underscores the sector’s enduring impact. From 1995 to 2024, over 6,4-million vehicles, with a cumulative export value of R 1,95-trillion, have been shipped from South African shores. International trade agreements, particularly with the European Union and the United Kingdom, continue to be fundamental, accounting for 75,7% of exports in 2024, meaning three out of every four exported vehicles were destined for these regions.

The current year presents a complex operating environment. Geopolitical challenges, including new US import tariffs, have led to the loss of an estimated 25 000 vehicle orders from that market. Despite this, vehicle exports for the first half of 2025 were 3% ahead of the same period in 2024, even as overall production decreased by 2,2%. Domestically, new vehicle sales showed a strong increase of 14% for the first six months, a trend partly driven by a 69% influx of competitively priced imported vehicles.

A subsequent presentation struck a more cautious note, revealing that South Africa’s share of global vehicle production decreased from 0,67% in 2023 to 0,65% in 2024. This places the government’s 2035 target of achieving a 1% global market share under pressure. A central concern raised was the urgent need to transition towards electric vehicle production, as key export markets like the EU and UK move to ban new internal combustion engine vehicle sales by 2035. While some local manufacturers produce hybrid vehicles, none currently assemble battery electric vehicles domestically.

“The transition to new energy vehicles must be tailormade for a South African context and cannot be a carbon copy of what other countries and regions have done,” Neale Hill, CEO of Ford South Africa stated. He suggested that dramatic overhaul is not needed, but rather selective, targeted policies to support specific parts of the value chain where South Africa can be competitive.

The presentation concluded by highlighting a significant potential advantage. Africa, and South Africa in particular, holds vast mineral resources critical for the EV revolution, including 85% of the world’s manganese and 80% of its platinum. A clear call was made for immediate and structured collaboration between government and industry to develop a concrete framework, positioning the country to become a key player in the global EV value chain and secure the future of the automotive industry and its workforce.

“We are very concerned that our industry is falling behind Africa’s progressive automotive and industrial policy measures,” Hill warned. He concluded that the decisions taken now will fundamentally shape the future of vehicle manufacturing in South Africa, impacting its economic value, employment, and skills base. “We must act now before it is too late,” he said.

Adding to the forward-looking dialogue, Mike Whitfield, CEO of Stellantis South Africa, reflecting on the sector’s foundations, emphasised that its strength is rooted in historical cooperation between government, industry, and labour. He pointed to a major strategic development: the confirmation that Stellantis is proceeding with an investment in South Africa, affirming the country’s role as a strategic manufacturing base within the company’s global network.

This sentiment was echoed in a significant international achievement for the industry. naamsa announced that its CEO, Mikel Mabasa, has been nominated to serve as a permanent member of the International Organization of Automobile Manufacturers (OICA). Described as a “United Nations Security Council for the automotive industry globally,” this position will enable South Africa to help shape the global automotive trajectory and ensure the African continent is not left behind in critical conversations about the future of mobility.

As the week’s discussions concluded, the message from Gqeberha was clear. The South African automotive industry, built on nine decades of collaboration and adaptation, stands at a pivotal moment. The path forward requires agility, policy certainty, and a united effort to harness its inherent strengths—from its deep manufacturing expertise to its mineral wealth—to navigate the electric future and secure its position as a global automotive player.

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Africa Automotive: Stellantis plant opens in Algeria

The manufacturing facility in Tafraoui, Algeria promised by Stellantis in 2022 is now a reality with the start of production of Fiat 500 and Doblò models in a plant that saw an initial investment of €200-million and will assemble 90 000 cars annually for the Algerian market with a 35% localisation rate.

A Letter of Intent was signed between Stellantis and the Algerian Authorities to accelerate Stellantis contribution to the development of the Automotive Industry; a step 2 ambition, in terms of production capacity, local integration rate and the creation of a Stellantis Academy in partnership with the Algerian Education Ministries. This new phase is associated with conditions of success that are being discussed between the two parties.

"Today, a letter of intent regarding the expansion of Stellantis' industrial project in Algeria will be signed to increase the production capacity of this plant, which will be oriented towards the local and export markets," declared Ali Aoun, Minister of Industry and Pharmaceutical Production, during his speech. "We, as public authorities, commit to ensuring the support of all investment projects aimed at creating wealth and employment."

"Our Dare Forward 2030 plan envisioned Algeria being cemented into Stellantis’ regional future, and today we’re proud to have followed through on this plan by bringing Fiat brand to the country and providing great models to our Algerian customers through the manufacturing of the cars in Algeria,” said Stellantis CEO Carlos Tavares. “This is the beginning of a journey of growth and development for the benefit of the citizens of Tafraoui and Algerian customers. With today’s further announcement, we are poised to increase our commitment towards the country.”

The Tafraoui plant, covering an area of 80 acres, will initially have an annual assembly capacity of 90 000 cars, featuring a range of four models, beginning with the Fiat 500 and the Fiat Doblò. In 2024, it aims to produce 40 000 units in SKD. The plant will reach 90 000 units in CKD including painting welding and stamping by 2026.

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The industrial project has already created 500 direct jobs in Algeria in 2023, with the aim of reaching 1 200 jobs by end of 2024 and 2 000 jobs by 2026. In addition, the local supplier ecosystem will create more than 1 600 indirect jobs by 2026.

Stellantis launched its commercial operations in Algeria in March this year and has had a very strong ramp-up, closing the year with more than 50 points of sales covering 65% of the Algerian territory while offering nine models and two brands: Fiat and Opel; with a team with close to 900 people and a robust logistics setting to deliver daily cars to our esteemed Algerian customers.

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Africa Automotive - Electric deals for Cairo

Stellantis, the global auto giant formed out of the merger between the PSA Peugeot Citroën Group and Fiat Chrysler, is to spend around $35-billion to build a factory in Cairo for the manufacture and export of electric vehicles by 2025, while Ashok Leyland from India is also looking to Cairo as a market for its buses.

The Ashok Leyland venture comes with the signing of a joint venture deal with Egyptian car manufacturer El Nasr Automotive Manufacturing and, initially, will extend and modernise an El Nasr factory in Cairo that will produce trucks, vans, pick-ups and buses in all-electric mode.

Ashok Leyland is looking to see its range of ‘circuit’ buses moving about African roads – this vehicle with artificial intelligence (AI) needs a single daily charge to travel up to 120 kilometres.

In recent years, the global automotive industry has witnessed a significant shift towards sustainable transportation solutions, with electric vehicles (EVs) emerging as a promising alternative to traditional fossil fuel-powered cars.

While the adoption of EVs has gained momentum in many parts of the world, Africa, with its unique set of challenges and opportunities, is gradually making progress in embracing this transformative technology. This article delves into the advancements of electric vehicles in Africa, exploring the driving forces behind their growth, notable initiatives, and the potential impact on the continent's sustainable development.

Challenges and Opportunities

Africa faces several challenges when it comes to the widespread adoption of electric vehicles. These challenges include limited charging infrastructure, high upfront costs, inadequate access to electricity, and concerns about range anxiety.

However, amidst these challenges lie opportunities that can be leveraged to accelerate the growth of EVs. Africa's abundant renewable energy resources, such as solar and wind, present an ideal foundation for sustainable charging infrastructure. Additionally, the continent's rising middle class, urbanisation trends, and the need for cleaner transportation solutions create a fertile ground for EV market growth.

Public-private partnerships and investments play a crucial role in driving the progress of electric vehicles in Africa. International organisations, development banks, and private companies have recognised the potential of the African market and are investing in various EV-related initiatives.

For example, the African Development Bank launched the ‘Green Mini-Grid Market Development Program’ to support the deployment of off-grid renewable energy systems, including solar-powered charging stations. Companies such as Tesla, BYD, and Nissan have also shown interest in expanding their presence in Africa, either through partnerships or direct investments.

Public transportation represents a significant opportunity for electric vehicle adoption in Africa. Many African cities are characterised by congested roads and poor air quality, making the transition to electric buses a viable solution.

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Colin-on-Cars: Turin unshrouded

Members of the public will finally be allowed to see the historic collection of cars and other historical artefacts that form part of The Heritage Hub – the combine history of Fiat, Lancia and Abarth.

Made possible by the collaboration between the Stellantis Heritage department, the Municipality of Turin and the Museo Nazionale dell’Automobile (the Italian national motor museum), access is via Gate 31 to the Mirafiori industrial complex – located at Via Plava 80, Turin.

The space will host two guided tours per day, one in the morning and another in the afternoon, each lasting around two hours. The site will be open on Wednesdays, Fridays and Saturdays with tickets available online from the MAUTO website.

Brands

The Stellantis Group Heritage Hub is an exhibition space covering about 15 000 m2, ‘home’ of the historical collection of automotive brands from Turin: Abarth, Fiat and Lancia.

To highlight the link between the city and the motor vehicle industry, the former Officina 81 at Mirafiori was selected as its site. Open since 1968, it was an active centre of production for over 30 years, focusing on mechanical components. The space has undergone a meticulous restoration to safeguard its industrial spirit, maintaining the raw concrete floor and the original colour scheme of its time.

The middle of the exhibition space features 64 classic cars, split into eight themed areas:

- Records and Races, protagonists that triumphed on the main circuits;

- Concepts and Customisations, very rare cars, and extraordinary one-offs;

- Archistars, models that revolutionised the architecture of the car, while respecting the principles of productivity and functionality;

- Eco and Sustainable, bringing together cars that stood out for their environmental credentials;

- Small and Safe, models that combined safety and limited dimensions;

- Style Marks, cars that made design history;

- Epic Journeys, vehicles that featured in unforgettable journeys;

- The Rally Era, the milestones of the golden age of road and dirt racing.

The remainder of the collection is displayed within the two long sides of the building, divided by brand, and set out in chronological order. As well as Fiat and Lancia cars, selected models from the Alfa Romeo, Autobianchi and Jeep brands are also on display.

Vintage

There is no shortage of special features, shown by 16 vintage Fiat cars belonging to the Carabinieri police force. From the 600 Multipla to the Panda, via 1100 and Campagnola models, the Carabinieri selection covers a time span of almost half a century, highlighting the deep roots of a collaboration that remains active to this day.

The exhibition space at the entrance to the pavilion, hosts a permanent display on the history of Mirafiori from 1939 to date.  As confirmation of its multifunctionality, the space also includes an area designed for workshops and another for conferences, with capacity for up to 200 people.

Meeting

The ‘engines area’ is an ideal setting for a meeting space, hosting two long benches featuring a selection of over 30 of the most important engines, designed and manufactured by the Group's Italian brands.

True milestones in the history of Italian engines such as the four-cylinder from the ‘100 series’ – which debuted in 1955 in the Fiat 600 and was then used, in its various evolutions, for around 50 years – contrast with pilot projects for electric motors, turbines and even steam engines.

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Colin-on-Cars - New technologies on display

Wild and wacky; clever and useful or just plain futuristic. These are the primary characteristics of the annual Consumer Electronics Show (CES), held in Las Vegas, Nevada every January.

This year the show starts on January 5 and the Stellantis Group is making a major effort to highlight the technology that powers Stellantis’ global drive to deliver breakthrough technologies and customer-centric solutions that power the future of its 14 brands.

Integral

“Vehicles are an integral part of people’s digital lives and the future of mobility is fuelled by technology,” says Carlos Tavares, Stellantis CEO. “Electrification, with our 30 electrified models available including fuel cell vans, connectivity and autonomy are all important facets of that future but each cannot stand alone. Our creativity, engineering and innovative partnerships are accelerating our drive to build the best and most sustainable mobility for our customers.”

Viewers do not need to be in Las Vegas to connect with the Stellantis experience. The Stellantis CES 2022 virtual experience goes live January 5, 2022, at 6 p.m U.K time at: stellantisces2022.com. 

Elements of the Stellantis stand at CES 2022 include:

- Chrysler Airflow: Chrysler debuts the Airflow Concept, leading the brand's transformation to clean mobility and seamlessly connected customer experiences.

- Citroën Skate Mobility Concept: An autonomous and electric transport robot that moves around cities, paired with Pods to offer fluid, shared urban mobility.

- Citroën Ami: An ultra-compact, two-passenger urban EV. In France, the Ami is accessible by users as young as 14, with ‘à la carte’ offerings that target specific uses, a fully online journey, innovative distribution methods and a three-hour charge time.

- DS E-Tense FE21: Two-time defending champion in the ABB FIA Formula E World Championship, the 900 kilogram car (with driver) uses a 900-volt system that includes a 52 kWh battery, powering a 252 kW electric motor. The lightweight design combined with electric torque drives the car from 0-100 km/h in about 2,8 seconds.

- New FIAT 500: The new 500 is the FIAT flagship and stands for New Dolcevita, social relevancy and sustainability. New 500 is connected, has a range of up to 318 km, features 85 kW fast charge and is the first city car with Assisted Driving Level 2. The New 500 is the most sold EV within the Company.

- Wagoneer and Grand Wagoneer: The premium extension of the Jeep brand offers 4x4 capability, on-road refinement and technology features, such as Fire TV built in and a front passenger screen experience.

- Jeep Wrangler 4xe: The most capable, technically advanced and eco-friendly Wrangler ever. Available in Europe, China and the United States, the Wrangler 4xe’s plug-in hybrid powertrain is capable of up to 33 km of nearly silent, zero-emission, electric-only propulsion.

- Jeep Grand Cherokee 4xe: The first Grand Cherokee to offer a plug-in hybrid electric variant. Its introduction signals the continued pursuit of the brand’s global vision of accomplishing ‘Zero Emission Freedom,’ by offering a fully electric Jeep vehicle in every SUV segment by 2025. The Grand Cherokee 4xe targets an estimated 40 km of all-electric range with 279 kW and 637 Nm of torque and is equipped with the award-winning Uconnect 5, which offers new technology for 2022 Jeep Grand Cherokee, including a 10,1-inchdisplay, five-times-faster operating speed (when compared to the previous generation) and over-the-air (OTA) updates.
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