Lathitha Mbambo: Breaking Gender Barriers in Automotive Trades

Service tools do not know if you are male or female - they respond to skill and focus. That is how 21-year-old Lathitha Mbambo describes her approach to the workshop floor at Hyundai Bellville in Cape Town, where she is upending expectations about who can excel in technical trades.

Mbambo (21) began her apprenticeship in June 2025 and has since serviced roughly 100 vehicles each month. To date, she has worked on more than 800 vehicles and maintained a clean record with no comebacks. In dealership language, comebacks refer to vehicles that return because faults were not properly resolved - a key measure of technical competence and quality assurance. For any technician, a zero-return rate across hundreds of services is notable. For a first-year apprentice, it is particularly striking.

"Every vehicle that comes into the workshop represents someone's safety and trust," Mbambo says. "I approach each service as if it were my own car. If I sign off on it, I want to be 100% confident it will not return with a fault."

Keevin Peters, Dealer Principal at Hyundai Bellville, said Mbambo's productivity matches that of experienced technicians. "In this business, comebacks affect customer confidence and operational efficiency. To see this level of dedication and consistency from an apprentice speaks to both her discipline and commitment."

Managing 100 vehicles a month demands mechanical knowledge, time management, diagnostic skill and attention to detail. Mbambo said she has learned small things matter. "A missed check today becomes a problem tomorrow. My motto is do it right the first time."

Her presence in the workshop also reflects a broader shift in the automotive sector, as more young women enter technical careers. She said the tools of the trade do not distinguish between genders - only between those who apply themselves and those who do not.

In a separate development highlighting the importance of skills development, Isuzu Motors South Africa has renewed its partnership with the Nelson Mandela University's Govan Mbeki Mathematics Development Centre. The collaboration, which began in 2018, focuses on strengthening mathematics and physical science education in under-resourced schools in Nelson Mandela Bay.

The programme combines learner support, teacher training and digital resources. In the 2025 matric exams, learners who participated achieved an 80% pass rate in both mathematics and physical science. That compares with national pass rates of 64% for mathematics and 77,3% for physical science. Of the 30 learners in the cohort, 25 qualified for bachelor's or diploma studies, opening pathways to tertiary education and careers in science, technology, engineering and mathematics.

Natalie Gill, project leader at the Govan Mbeki Mathematics Development Centre, said the initiative provides interactive digital tools and professional development for teachers. "With the support received from Isuzu, we have been able to empower a significant number of learners by strengthening connections between classroom learning and real-world challenges," she said.

Nandi Matomela, Department Executive for Corporate Affairs at Isuzu Motors South Africa, said education remains a core pillar of the company's social investment strategy. "Through this collaboration, we have encouraged the adoption of STEM subjects in our schools, aligning learning outcomes with the skills and needs of the future," she said.

Several former participants in the programme are now studying computer science, civil engineering, electrical engineering and accounting. The renewed partnership aims to expand access to innovative teaching tools and mentorship, supporting more young South Africans in pursuing opportunities in the STEM economy.

https://bit.ly/4tQhPUn

New AfCFTA Rules Boost African Automotive Trade

The African Association of Automotive Manufacturers (AAAM) has described the approval of new trade rules for the automotive sector under the African Continental Free Trade Area (AfCFTA) as a major step forward for industrialisation on the continent.

The decision, formalised during the 39th Ordinary Session of the Assembly of African Union Heads of State and Government, paves the way for duty-free trade in vehicles and components across member states.

The Rules of Origin (RoO) for automotive products, which apply to customs codes 8701 to 8716, were initially agreed upon by ministers at the AfCFTA Council of Ministers meeting in Cairo in September 2025. The formal endorsement came from heads of state during their gathering in Addis Ababa, Ethiopia, recently.

Under the newly adopted framework, vehicles and components must contain at least 40% local content to qualify for preferential trade terms under the AfCFTA. This means up to 60% of materials may be sourced from outside the continent without affecting the product’s eligibility to be traded as ‘Made in Africa’. The arrangement includes a review clause after five years and is intended as an interim measure to encourage local manufacturing and value addition.

Victoria Backhaus-Jerling

Victoria Backhaus-Jerling, Chief Executive Officer of AAAM, said the agreement provides clarity that has long been needed by industry players. “For the first time, we have a clear and harmonised definition of what it means for a vehicle to be considered ‘Made in Africa’. This kind of certainty is what investors look for. It supports the development of regional supply chains and aligns with the broader goals of the AfCFTA Automotive Strategy.”

Wamkele Mene, Secretary-General of the AfCFTA Secretariat, noted the new rules offer legal predictability for manufacturers considering local production. “This approval gives the industry the assurance needed to invest in local assembly and component manufacturing. We encourage the private sector to build on this momentum and work with all stakeholders to ensure inclusive growth across the African automotive value chain.”

AAAM has been closely involved in the development of the framework, working alongside the AfCFTA Secretariat, Afreximbank, and various government bodies to shape rules that support local content development and job creation.

Martina Biene

Martina Biene, President of AAAM, highlighted the cooperative effort behind the milestone. “This achievement reflects what can be done when public and private sectors work together. The framework enables African countries to trade more competitively among themselves and lays the groundwork for the continent to become a more serious participant in global automotive markets.”

With the rules now in place, countries that have committed to immediate or phased tariff liberalisation under AfCFTA categories A and B will be able to begin preferential trade in automotive goods. The move is expected to support the growth of local assembly and component manufacturing, and over time, give African consumers access to more affordable vehicles produced within the continent.

https://bit.ly/4qM9HkR

Andrew Kirby Sounds Alarm on SA Motor Industry's Decline

Andrew Kirby did not mince words when he talked about South Africa’s motor industry. He described a sector losing ground—local content is dropping quickly, exports are too dependent on Europe, and while the world races toward electric vehicles, South Africa’s barely off the line.

Andrew Kirby

Honestly, it was the bluntest industry review anyone has made in years. Kirby, president and CEO of Toyota South Africa Motors, recently presented the 2026 State of the Motor Industry address and skipped the usual talk about resilience or market share. Instead, he pointed directly at the cracks in one of South Africa’s last big manufacturing pillars.

He did not soften the numbers. Right now, only a third of cars sold in South Africa are built here. In 2006, it was 56%. The decline is speeding up. Kirby’s outlook for 2026? Even worse.

“We really lack scale in South Africa,” he said. He meant more than just production numbers—he pointed to the country’s population, limited public transport and basic mobility needs. “We should be much bigger than this.”

Last year’s headline—600 000 vehicles sold—sounds impressive if you do not look deeper. But Kirby did. Take away the increase in cheap, entry-level cars and there is hardly any actual value growth.

“It’s not all that it seems,” he cautioned.

Toyota's manufacturing facility in Prospecton near Durban

Exports look good on paper—609 000 vehicles produced last year, 411 000 exported. That is 68% of local output, mostly to the UK and EU. At first glance, it seems like a win. Look closer, and it is a vulnerability.

Eighty-one percent of those exports go to Europe and the UK. Africa, once important, now only takes 8%. The continent is flooded with used imports and cheap new cars from the Middle East, so private buyers barely count. Most sales rely on government fleets.

“We can’t just shrug and say we’ll export everything to Europe,” Kirby said. “Because those 400 000 exports? That is going to change.”

Regulations are moving quickly. The UK wants zero-emission vehicles, Europe is tightening emissions rules, and every new regulation makes it harder for South Africa to keep up (even with US President Donald Trump removing carbon restrictions).

Temporary extensions for hybrids or low-carbon steel do not fix the issue; they just show how unstable the electric vehicle sector still is. That uncertainty makes long-term planning impossible.

“In the next five years, we’re going to see a big drop in exports to Europe and the UK,” Kirby warned.

South Africa simply does not have a competitive electric vehicle industry yet. The few new energy vehicles sold locally are not made with local parts. No scale, no localisation. No localisation, no cost advantage. It is a loop South Africa cannot escape—and time’s running out.

Kirby’s strongest point came when he spoke about real value addition. That is the core of any manufacturing sector. In 2000, South Africa’s auto manufacturing value was $720 per person. Now? It has dropped to $614. Not only no growth, but a step backwards.

“We’re de-industrialising too soon,” he said. “Are we seeing the first signs of that in auto?”

He mentioned Vietnam—and not by chance. Smart policy has let Vietnam surge ahead, while South Africa has lost advantage after advantage. Electricity is costly, even with improved loadshedding. Wages rise faster than inflation. Water is now a concern—Toyota had to build its own dam to keep operating. Logistics, especially rail, remain expensive, even after port improvements.

Production at the Toyota factory in South Africa

The entire supply chain is under strain. Steel, tyres, the network of component makers built up over decades—all are feeling the pressure.

“We’re lucky we spent 100 years building this manufacturing base,” Kirby said. “If we lost it now and tried to restart in 2026, it wouldn’t happen.”

Right now, the industry needs a serious, honest discussion about policy—before it is too late.

Kirby made one thing clear—he is not looking for quick fixes or dramatic interventions. That is not the point. What he is after is harder: a smart, well-run industrial policy. One that understands the difference between a healthy import market and replacing imports just for the sake of it.

“To be honest, the country just can’t afford that,” he said, referring to heavy-handed import substitution. “The foreign exchange hit is massive, and it’s something we often overlook.”

His argument? Instead of sweeping changes, he is calling for targeted, incremental adjustments to strengthen competitiveness without blowing the budget. The aim: raise local content back up to 40%-50%. Not by hiding behind tariffs, but through timely policies that recognize imports are necessary, though over-reliance carries risks.

He was equally blunt about new energy vehicles. South Africa does not have the option to say the transition is unaffordable.

“If we say we cannot make the shift, we are giving up on exports as well. All we will have left is making outdated tech for a shrinking market,” Kirby said. “That’s just not the way South Africa has operated over the past hundred years.”

Toyota’s strategy sums it up—they are investing in multiple technologies: hybrids, plug-in hybrids, battery electrics, fuel cells, even carbon-neutral hydrogen engines. There is no single solution, and in South Africa, hybrids will dominate for years. But the issue is clear: only 4% of new energy vehicles sold locally are built here. That gap is right in front of us.

This is not a promise—it is a possibility

The bz4x will be the first electric model launched in South Africa by Toyota

Kirby sees a real opportunity. With the right policies—now, not next year—the local market could surpass 700 000 units. Manufacturing could reach 720 000. That would mean R21-billion more in value and 14 500 new jobs, not counting the broader impact.

“Our planning window is three to four years,” he said. “We are already investing, and to be honest, we are running behind. If we can get this sorted by 2026, it will decide our investments for 2029 and 2030.”

He did not state the warning outright, but it is clear. Other countries are securing investment through clearer strategies and more stable policies. South Africa is competing for those same opportunities, but it is a tough race.

Still, Kirby sees something positive—a genuine, open dialogue between government, labour, and the industry group, naamsa. People are speaking honestly. But talking is not policy.

“We need to act. Now,” he said.

Compete, do not collapse!

Goolam Ballim, Standard Bank’s Chief Economist, set out the bigger picture. The world is not breaking down—it is reorganizing. Alliances, supply chains, the rules of the game—they are all changing. Now, resilience is more important than squeezing out every bit of efficiency.

For South Africa, this shift is both a risk and an opportunity. The old model—relying on a single export market, importing finished vehicles, and exporting most of what we build—is fading. What happens next depends on the decisions we make now.

Kirby’s remarks stood out because he was direct. He identified the problems, put real numbers on what is at stake, and outlined a practical goal. He did not minimize the challenge, but he was clear: the solutions are there if we are ready to move.

“We shouldn’t just ask how to avoid becoming an import replacement market,” he said. “We need to figure out how to build something stronger—to support the circular economy, create jobs, develop skills, and grow a dynamic auto industry and industrial base.”

Now it comes down to this: can policy move quickly enough to match the market? The window is open, but it will not stay open for long.

https://bit.ly/4kITMCG

Afreximbank Membership: Transforming South Africa's Auto Market

In a strategic move poised to reshape the continent’s economic landscape, South Africa’s recent accession as a shareholder of the African Export-Import Bank (Afreximbank) is being heralded as a potential game-changer for its cornerstone auto industry.

Analysts suggest the decision could unlock crucial finance, accelerate the implementation of the African Continental Free Trade Area (AfCFTA), and ultimately steer the sector towards a more prosperous, integrated future.

A US$8-billion commitment: HE Cyril Ramaphosa, President of South Africa and Dr George Elombi, President and Chairman of Afreximbank at the Country’s accession signing ceremony, marking the launch of a major Country Programme engineered to bolster the South African economy

The local automotive industry, a critical pillar of the national economy contributing nearly 5% to GDP and supporting hundreds of thousands of jobs, has long grappled with the challenges of limited scale, fragmented markets, and expensive access to trade finance. Joining Afreximbank directly addresses these pain points.

The most significant potential impact lies in the synergy with the AfCFTA. While the agreement promises a continental market of 1,3-billion people, its rollout has been hampered by logistical hurdles, payment system disparities and a simple lack of trade finance tailored for intra-African commerce.

Afreximbank, a key financial architect of the AfCFTA, operates the Pan-African Payment and Settlement System (PAPSS), which allows for instant cross-border payments in local currencies.

The macroeconomic outlook for local automakers, battered by global supply chain woes and sluggish domestic demand, stands to gain substantially. Increased export volumes into Africa would improve plant utilisation in places like Kariega, East London, and Rosslyn, enhancing economies of scale and potentially making local production more cost-competitive globally.

Furthermore, Afreximbank’s project finance capabilities could attract investment into the critical transition to new energy vehicles, however success hinges on our local industry’s agility to produce vehicles competitively tailored for diverse African consumers and on government’s parallel work to fix our ports, rails and energy supply.

If these domestic challenges are met, the combination of Afreximbank’s financial muscle and the AfCFTA’s market access could transform South Africa from a powerhouse serving mainly its domestic and traditional European export markets into the undisputed automotive hub of Africa.

The journey has begun, and the industry is now watching closely to see how quickly the promised finance flows onto the factory floor and out through the continent’s borders.

More than 2-million VW Polo models have been built at the Kariega plant

As always, there is a ‘but’ and in this case it comes from Volkswagen South Africa.

When Volkswagen Group Africa (VWGA) chairperson and managing director Martina Biene wrote to President Cyril Ramaphosa shortly before Christmas, it was an effort to push urgency into a process she believes has dragged on far too long, with real implications for the future of South Africa’s automotive industry.

Speaking at VW’s annual Media Indaba in Kariega, Biene said: “I wrote a letter to the President prior to Christmas. I mainly outlined that for us at VWGA, this year is crucial for securing an investment decision from VW headquarters for the next project in the pipeline.”

Her request was straightforward: clarity. Not only on the financial viability of future projects, but also on whether South Africa’s policy direction gives investors enough confidence to commit long-term capital.

“For this investment decision, they look at the economics and the business case,” she explained. “But headquarters also look at what’s happening in the country. One of their non-negotiables is seeing improvement in South African policies.

“You might have a business case,” she cautioned, “but there are stronger business cases elsewhere if we can’t show that investing here is sustainable.”

She didn’t mince her words: “This year for us is make or break.”

Professor Adrian Saville, economist and strategy specialist at GIBS, echoed the concern. Asked whether a major manufacturer could realistically leave South Africa, he didn’t hesitate.

“Could a specific business leave? Absolutely. Capital can go anywhere,” he said. “There are 200 markets you can choose to allocate capital to. There’s nothing that guarantees South Africa a place at the front of the queue.”

Saville pointed out that the country’s industrial history is full of once‑significant manufacturers that no longer exist. “South Africa is an industrial graveyard. No company is too big, too established or too important to walk away if conditions deteriorate.”

Despite the seriousness of her message, Biene says she received no direct reply from Ramaphosa. “The unfortunate thing is that the President didn’t reply to me,” she confirmed.

She did note that there has since been activity between the Automotive Business Council (Naamsa) and the Presidency’s staff, suggesting the letter may have prompted some movement behind the scenes.

Whether that translates into actual policy progress remains unclear. “Am I satisfied with that? I don’t know,” she said.

Saville argues that certainty alone isn’t enough if the underlying policy is weak. “Policy certainty over a policy that doesn’t work is a death blow,” he said. “We’ve got a knife at a gunfight.”

Still, both he and Biene acknowledge that South Africa has shown it can get policy right. The Automotive Production and Development Programme and the South African Automotive Masterplan are often cited as examples of what’s possible when government acts decisively.

The challenge, Biene says, is timing. “We don’t have the luxury of two or three years of debating and deliberating. The requirement is urgent.”

Her letter to the President was intended to make that point clear. Whether the message lands will matter not only for Volkswagen, but for the entire vehicle manufacturing sector in South Africa.

https://bit.ly/3MsFyZQ

Morocco vs South Africa: The Future of the Automotive Industry

A strategic shift is unfolding across the African automotive landscape, defined not by a single event but by a confluence of ambitions in boardrooms from Casablanca to Johannesburg. The recent, quiet establishment of Tesla’s commercial presence in Morocco, signaled by the recruitment of a Country Sales & Delivery Leader in Casablanca, represents more than a new showroom; it is a calculated entry into a market being deliberately engineered as an electric vehicle hub.

This move coincides with a parallel gravitational pull from Chinese automotive manufacturers toward South Africa’s established industrial base, setting the stage for a continental transformation driven by competing visions of the future.

BAIC factory in South Africa's Eastern Cape

Morocco’s ascent is not accidental. While its overall vehicle production of 559 645 units in 2024 trails South Africa’s historical output, its trajectory and focus are distinct. The kingdom is poised to manufacture between 40 000 and 50 000 fully electric vehicles in 2024, a figure that underscores a targeted industrial policy.

This output is particularly significant given that South Africa has yet to produce a single fully electric vehicle domestically. Morocco’s 5% year-on-year production increase is built upon foundational advantages: geographic proximity to European markets and a charging infrastructure network of approximately 1 000 stations, dwarfing South Africa’s estimated 400-500.

Government policy has been instrumental in creating a fertile environment. Exemptions from value-added tax and customs duties on EV imports have lowered financial barriers for consumers and manufacturers alike. The market response is quantifiable, with EV sales reaching 1 125 units in 2024 and projected to surge to 4 248 in 2025.

Toyota's Prospecton factory near Durban, Kwa-Zulu Natal

This policy framework, designed to position Morocco as a central hub for EV manufacturing and sales, is what makes Tesla’s entry a strategic beachhead. The American automaker’s presence is widely interpreted as a move to capitalize on this surging demand and the country’s export-oriented logistics, potentially encouraging other EV-focused brands to consider North Africa.

“The country offers a mature industrial ecosystem, a skilled and experienced workforce, and a supply chain that has been tested and proven over decades,” says Lydia Zhang, Executive Vice President for Client Coverage in Corporate Investment Banking at Standard Bank, quoted recently in FANews. Zhang notes  South Africa’s role as a gateway to a continent with low motorisation rates presents a compelling investment rationale.

Yet, South Africa’s path is markedly different. Its automotive sector, a cornerstone of manufacturing for decades, finds itself at a crossroads. The rise of Chinese brands like Chery, GWM, BYD and BAIC has reshaped the domestic market, moving them from fringe players to household names based on affordability and improving quality.

This commercial success is now prompting deeper consideration. Several leading Chinese original equipment manufacturers (OEMs) have launched feasibility studies into establishing local assembly plants in South Africa, attracted by the existing supplier base and potential for continental growth.

This interest emerges as traditional manufacturers reassess their South African operations. The potential vacuum creates an opportunity, but one fraught with the nation’s well-documented challenges. “Infrastructure constraints, including energy supply and logistics, continue to be monitored,” Zhang observes, adding investors seek clarity on tariffs, labour laws and long-term policy.

The policy environment itself is a subject of intense debate. Experts argue South Africa’s automotive tax structure inadvertently undermines its own industrial ambitions.

Ford Ranger assembly in the modern plant in Rosslyn, Pretoria

“Our vehicles are overtaxed,” says Professor Justin Barnes, Executive Director of the Toyota Wessels Institute for Manufacturing Studies. He highlights an “inverted market structure” where ad valorem taxes are disproportionately high for cheaper vehicles, stifling domestic demand. Furthermore, the duty differential between imported completely built-up (CBU) units and locally assembled completely knocked-down (CKD) kits is considered too narrow, disadvantaging local component manufacturers who effectively compete against near-zero import duties.

South Africa’s Automotive Masterplan 2035 envisions producing 1,4-million vehicles annually, with half for the domestic and regional African market. Currently, the structure is inverted; the country imports more vehicles than it manufactures for local consumption. “We need a robust domestic market and need to make the regional market our operating environment,” Barnes argues. Failure to do so, he contends, leaves South African producers vulnerable to the demanding and rapidly shifting requirements of distant developed export markets, particularly as they transition to new-energy vehicles (NEVs).

This NEV transition is where the contrast with Morocco becomes stark. South Africa’s high import tariffs and limited purchase incentives have resulted in a negligible EV market. The finalization of a revised Automotive Production and Development Programme (APDP) framework to incentivize NEV production is seen as crucial. Such a policy could unlock a strategic advantage: South Africa’s duty-free trade access to Europe. This access could position the country as a manufacturing and export base for Chinese OEMs keen to produce NEVs for the European market.

“While we would expect Chinese OEMs to begin with semi-knocked down or limited-scale assembly, it is important that this evolves into full-scale CKD production within a defined timeframe,” says Lydia Zhang. “We see this progression as critical for job creation and meaningful local industry participation.”

The emerging picture is of a continent with two powerful, divergent automotive narratives. In the north, Morocco is leveraging agile policy, geographic advantage, and infrastructure investment to build a new, EV-centric manufacturing ecosystem from the ground up, attracting global pioneers like Tesla. In the south, South Africa’s established industrial complex, while grappling with internal policy contradictions and infrastructure woes, presents a compelling case for large-scale, traditional manufacturing investment, increasingly attractive to Chinese brands seeking scale and continental access.

The outcome will hinge on execution. Morocco must convert its potential into sustained industrial depth. South Africa must align its tax and trade policies with its masterplan ambitions to unlock regional demand and attract transformative investment. Together, these parallel developments signal that the African automotive industry is no longer on the periphery of global trends but is becoming a complex and contested arena where its future footprint is now being forged.

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The New North African Nexus: How Tunisia, Egypt, and Morocco are Vying for Automotive Supremacy

Something big is happening in North Africa, and it’s not what most people expect. The region’s old image—one of aid packages and political uncertainty—is fading fast. These days, it’s the roar of engines and the hum of factory floors driving the story.

While South Africa continues to dither in uncertainty, the automotive industry is taking center stage, pulling in massive investment and turning the area into a fierce battleground for the future of mobility. Tunisia, Egypt and Morocco are now competing for a spot at the top, each trying to outdo the other – and South Africa – in this billion-Rand race.

Image: Supplied

Tunisia’s latest play is grabbing headlines. After a high-profile visit from Li Shijie—a senior figure in the Chinese People’s Political Consultative Conference—Tunisia’s Foreign Investment Promotion Agency (FIPA) announced a real milestone: 22 Chinese companies are now operating in the country. That’s over R2-billion in foreign direct investment and roughly 1 100 new jobs on the ground.

Sleeves Rolled Up

But it’s not just about handshakes and speeches. At the meeting, FIPA’s Director General Jalel Tebib and Li Shijie rolled up their sleeves and got specific. They’re laser-focused on channeling Chinese investment into Tunisia’s sweet spots: automotive manufacturing, renewable energy, infrastructure, and tourism.

Tebib talked up Tunisia’s open-door policy and business-friendly climate, while Li pointed out the country’s skilled, affordable workforce, its prime location as a gateway to Europe and Africa, and the attractive trade deals that come with it. Both sides are betting big on their partnership, tying it all together with China’s Belt and Road Initiative.

Zoom in to the ground level and you’ll find the real pulse of this industrial shift: local innovators. Enter Bako Motors, a Tunisian startup that’s betting everything on solar-powered vehicles. Instead of following the crowd, Bako is using Africa’s most abundant resource—sunshine—to power their EVs.

Africa’s electric vehicle market is exploding, expected to top R76-billion by 2030. But there’s a catch: most EVs still rely on patchy power grids, which don’t always play nice. Bako Motors spotted a gap. Their solution? Compact cars and cargo vans with solar panels built right into the roof.

Image: Supplied

“Our solar cells cover more than half our energy needs,” says Boubaker Siala, Bako’s founder and CEO. “Look at our B-Van, designed for commercial deliveries—you get free energy for about 50 kilometers a day, which adds up to 17 000 kilometers a year. For businesses watching every Rand, that’s a game-changer.”

Three Wheels

Bako kicked off in 2021 with three-wheeled cargo vehicles, but they’ve quickly leveled up. Now, their four-wheeled B-Van hauls up to 400 kg and delivers a range between 100 km and 300 km. It’s priced from R1,6-million, aimed squarely at logistics and last-mile delivery companies. Their other model, the Bee, is a pint-sized two-seater perfect for city errands, starting at R1,2-million.

Sure, production is still modest—around 100 vehicles—but they’re thinking big. A third model is already on the drawing board, and the team’s gearing up for an export push, hoping their solar-powered EVs will carve out a niche across Africa.

Of course, Tunisia isn’t the only player in the game. Egypt and Morocco, the region’s heavyweights, are ramping up their own efforts with massive investments.

In Egypt, the government’s pulling out all the stops. At a recent ceremony in West Cairo Deputy Prime Minister Kamel Al-Wazir laid the foundation for the new MAC for Mobility Manufacturing Plant, bankrolled by the powerhouse Mansour Automotive Group. Think big—over R2,7-billion in initial investment. The goal? Produce 50 000 eco-friendly vehicles in the first phase alone.

Mansour Group’s chairman, Sir Mohamed Mansour, says the plant will bring in cutting-edge technology and create between 6 000 and 10 000 jobs. This is the start of Egypt’s Automotive Industry Development Strategy, aiming for a homegrown, fully integrated automotive sector. By 2032, they’re targeting annual production of 100 000 vehicles per major manufacturer, including 7 000 EVs, and want at least 35% of every car to be locally sourced.

Image: Supplied

“This factory is the seed of a future automotive city,” Al-Wazir said, framing it as the heart of Egypt’s plan to become a regional manufacturing hub for Africa and the Middle East.

Ramping Up

Not to be outflanked, Morocco continues its relentless ascent. The kingdom is already producing over a million vehicles annually and has plans to ramp this up to 2-million. The latest evidence of its momentum is the opening of a new R300-million factory in the Oujda Technopole by Austria’s Hirschmann Automotive.

The new 22 200-square-metre facility, set to create 600 new jobs, complements the company’s existing plant in Kenitra and underscores the country’s deep integration into global automotive supply chains.

During the inauguration, Khatib El Hebil, the Wali of the Oriental region, captured the sentiment, noting, “Oujda, a city of history and culture, is gradually transforming into a true hub for industrial, logistical, and technological development.”

The Road Ahead

The North African automotive landscape is now a tripartite race. Morocco is the established, export-oriented leader. Egypt is the massive domestic market leveraging its scale and government backing to force a dramatic localisation drive. And Tunisia is the agile newcomer, betting on niche innovation and strategic partnerships to carve out its own space.

For global investors and automotive giants, this competition is a boon, creating multiple, compelling options for manufacturing and assembly. For the continent, it signals the emergence of a sophisticated industrial corridor capable of not just assembling, but designing and engineering the vehicles for Africa’s future. The race for North African automotive supremacy is on, and the finish line is a multi-billion Rand prize.

https://bit.ly/49HXvg9

Boosting South Africa's Auto Industry Through Local Beneficiation

For decades, South Africa’s automotive industry has been a cornerstone of the local manufacturing sector, a testament to our industrial capability. From the bustling assembly lines in Kariega and Rosslyn to the state-of-the-art plant in East London, we build world-class vehicles. Yet, beneath the hum of this R500-billion-a-year industry lies a profound paradox: we are a mineral-rich nation exporting the very raw ingredients that could see us not just assemble but truly create the cars of the future.

The global automotive industry is undergoing its most significant transformation in a century, pivoting towards electric vehicles (EVs), lightweighting for efficiency and smart, connected technologies. This shift is not just about engines and software; it is a fundamental change in the materials that go into a car. For South Africa, this presents a generational opportunity to move up the value chain. The key lies in local beneficiation—the process of transforming mined ore into a higher-value product.

Here are the five most critical raw materials that, if beneficiated locally, would provide an unparalleled boost to the South African auto industry, creating jobs, fostering innovation, and securing our place in the global value chain.

1. Platinum Group Metals (PGMs): The Crown Jewels of Catalysis and Hydrogen

Image: Implats

The Raw Material: South Africa sits on roughly 80% of the world’s known platinum group metal reserves. These include platinum, palladium and rhodium.

Current State: We are the world’s leading miner of PGMs, but the vast majority is exported as refined metal or concentrate. We capture the mining risk and volatility but miss out on the immense value of specialised industrial and chemical applications.

The Beneficiation Opportunity: The narrative around PGMs is evolving. While their use in catalytic converters for internal combustion engines remains crucial, their role in the hydrogen economy is transformative.

Fuel Cell Electric Vehicles (FCEVs): FCEVs use hydrogen to generate electricity, with water as the only emission. The heart of a FCEV is its fuel cell, which requires significant amounts of platinum as a catalyst. Local beneficiation could see us move from exporting platinum bars to manufacturing catalyst-coated membranes (CCMs) or even entire fuel cell stacks.

·           Green Hydrogen Production: The other side of the hydrogen coin is production. Platinum is also a critical catalyst in proton exchange membrane (PEM) electrolysers, which produce green hydrogen using renewable energy.

The Impact: By establishing local facilities to manufacture fuel cell components and electrolysers, South Africa would not only supply the global auto industry but also catalyse its own domestic hydrogen economy. This creates a symbiotic ecosystem: local platinum enables cheaper green hydrogen, which powers local FCEVs and heavy transport, creating a circular and globally competitive advantage.

2. Aluminium: The Backbone of Lightweighting

Image: South32

The Raw Material: South Africa has a well-established aluminium industry, centred around smelters like Hillside in Richards Bay, which rely on imported alumina. However, we have vast reserves of bauxite and kaolin, the primary aluminium ores, which are largely unexploited for metal production.

The Beneficiation Opportunity: Every kilogram saved in a vehicle's weight translates directly into better fuel efficiency or longer battery range in an EV. Aluminium is the second most used material in vehicles after steel.

Primary and Secondary Smelting: Investing in energy security to make primary smelting more viable, and aggressively expanding the recycling of automotive scrap aluminium, would create a stable, low-cost local supply.

Advanced Alloy Production: Cars do not use generic aluminium; they require specific, high-performance alloys for body panels, chassis components, and battery enclosures. Local beneficiation means establishing plants that can produce these specialised automotive-grade aluminium sheets and extrusions.

The Impact: A reliable, cost-effective source of high-quality automotive aluminium would be a powerful magnet for Original Equipment Manufacturers (OEMs). It would lower the cost of production for local assemblers and make South Africa an attractive hub for manufacturing lightweight vehicle components for export, particularly for the EV market.

3. Manganese: Hardening the Steel of Our Ambition

Image: Implats

The Raw Material: South Africa holds over 70% of the world’s manganese resources, a metal indispensable to modern steelmaking.

Current State: We are the world’s largest producer and exporter of manganese ore, but we export most of it with minimal beneficiation. The real value is in adding it to steel.

The Beneficiation Opportunity: Manganese is a key alloying element that adds strength and wear-resistance to steel. Over 50% of a modern car's weight is still high-strength steel.

Ferromanganese Production: The first critical step is to expand our existing capacity to produce ferromanganese (a key intermediate product). The real prize, however, lies beyond.

Automotive Steel Production: The goal is to channel our local manganese into the production of advanced high-strength steel (AHSS) and ultra-high-strength steel (UHSS) at local mills like ArcelorMittal South Africa. These specialised steels are essential for making passenger safety cages and components that are both lighter and stronger.

The Impact: Creating a fully integrated pipeline from our manganese mines to local AHSS production would decouple our auto industry from volatile global steel prices and supply chain disruptions. It would provide a unique, raw material-based competitive edge for both our vehicle manufacturers and our component suppliers.

4. Iron Ore: The Foundational Metal, Reforged

Image: Arcelor Mittal

The Raw Material: We are a major global producer of high-quality iron ore from the Sishen mine and others in the Northern Cape.

At present, although ArcelorMittal uses some of this ore domestically, a sizeable portion is shipped overseas. The local steel industry has faced well-documented challenges, from energy costs to global competition.

The Beneficiation Opportunity: The opportunity with iron ore is not just about making more steel but making smarter steel specifically for the automotive sector. This goes together with manganese beneficiation.

Direct Reduced Iron (DRI): As the world moves towards greener steelmaking, DRI technology using green hydrogen (itself enabled by local PGMs) presents a path to produce "green steel" with a significantly lower carbon footprint.

Specialised Automotive Castings: Beyond sheet steel, local foundries can use high-purity iron to produce sophisticated engine blocks, brake components and other critical castings, moving beyond basic parts to high-value, precision items.

The Impact: A revitalised, competitive, and increasingly green local steel industry is non-negotiable for a resilient auto sector. It provides the foundational material security without which the industry cannot confidently plan for long-term growth and export-led expansion.

5. Vanadium: Powering the Electric Revolution

Plugged in chargers into two electric cars at charge station

The Raw Material: South Africa is one of the world's top three vanadium producers, with massive reserves housed in the Bushveld Igneous Complex.

Current State: Almost all our vanadium moves overseas as ferrovanadium or vanadium pentoxide, primarily for strengthening steel abroad.

The Beneficiation Opportunity: Vanadium’s star is rising because of one technology: Vanadium Redox Flow Batteries (VRFBs).

Stationary Energy Storage: The stability of South Africa’s auto manufacturing is hamstrung by an unreliable grid. VRFBs are ideal for large-scale, industrial energy storage. They can provide backup power for entire manufacturing plants, mitigating the impact of load-shedding.

EV Battery Ecosystem: While not used in the vehicle's battery itself, VRFBs are crucial for charging infrastructure. They can store solar energy during the day to power fast-charging stations at night, solving a key hurdle for widescale EV adoption.

The Impact: Local beneficiation of vanadium into electrolyte and full battery systems would directly support the auto industry by decarbonising and securing its energy supply. It creates a new, high-growth industry in energy storage that dovetails perfectly with the needs of modern, energy-intensive automotive manufacturing and the EV ecosystem.

The Road Ahead: An Integrated Strategy

Toyota's Prospecton plant

These five materials are not isolated opportunities; they are interconnected. Local PGMs can enable the green hydrogen needed for green iron and steel production. That manganese-rich, green steel, in turn, is used to build the factories and chassis for vehicles whose manufacturing is secured by vanadium batteries and whose powertrains may be powered by platinum-based fuel cells.

Realising this vision requires more than just market forces. It demands a coherent and aggressive industrial strategy—a partnership between government, mining houses, and the automotive industry. This includes:

· Policy Certainty: Creating a stable regulatory environment that incentivises local value-addition over raw exports.

· Investment in Energy: Solving the electricity crisis is the absolute prerequisite. The beneficiation of aluminium, iron and vanadium is intensely energy dependent.

· Research & Development: Establishing centres of excellence focused on mineral beneficiation and its application in the automotive and energy sectors.

The raw materials are beneath our soil. The industrial base is in our factories. The choice is ours: to continue digging and shipping, or to start building, innovating, and powering the next generation of global mobility. The road to a richer, more industrialised South Africa is, quite literally, paved with the minerals we already own.

This article is based on research from the Minerals Council South Africa, the Department of Trade, Industry and Competition (the dtic), Automotive Production and Development Programme (APDP) reviews and reports from the International Energy Agency on critical minerals.

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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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Illegal Vehicle Imports Hinder African Automotive Goals

ALGIERS – A concerted drive by African nations to build a integrated continental automotive industry is facing a formidable obstacle: the pervasive influx of illegally imported used vehicles and a critical lack of affordable financing for new cars.

This challenge was a central theme at the recent African automotive forum, part of the Intra African Trade Show, where policymakers and industry leaders outlined an ambitious vision to transform the continent from a primary importer of vehicles into a global manufacturing and export hub under the African Continental Free Trade Area (AfCFTA).

Chery Tiggo 2 Pro on display at the Africa Automotive Show in Algiers

A key pillar of this strategy, according to Gainmore Zanamwe, Director of Trade Facilitation for the African Export-Import Bank (Afreximbank), involves “freezing out second-hand vehicles imports” and “incentivising local production” to ensure Africa becomes a “manufacturing hub for mobility” rather than a “dumping ground for vehicles.”

However, this ambition clashes with the current market reality. Data indicates while new vehicle sales across the continent sit at approximately 1,2-million units annually, the number of used vehicle imports, both legal and illegal, far exceeds this figure. In South Africa alone, it is estimated over half a million illegally imported used cars are on the roads, representing a significant drain on national revenue.

“This illegal trade is not just a statistic. It is a direct attack on our economy,” says Martina Biene, President of the African Association of Automobile Manufacturers (AAAM) and CEO of Volkswagen Group Africa: “It drains our fiscus between five and eight billion Rand every year in lost taxes. It undermines our local manufacturers and holds back our industrial development.”

Stellantis stand showing Fiat Panda parts that are made locally

The demand for used vehicles is primarily driven by affordability. High interest rates across many African nations, often reaching double digits, place formal new vehicle financing out of reach for a large portion of the population. Financial institutions also cite challenges with vehicle tracking and valuation as barriers to offering more accessible credit.

“The issue is that high interest rates in most countries are in the two digit levels, and it makes it very difficult for consumers to have access to affordable financing,” added Zanamwe. “This creates a cycle where low demand prevents the economies of scale needed for local factories to produce affordable new vehicles.”

The situation is exacerbated by the practices of some international exporters. Research indicates used vehicles from markets like Japan and Singapore are often sold at very low prices or even written off and shipped abroad, making it impossible for locally manufactured units to compete on price alone.

In response, industry players are exploring innovative solutions. Volkswagen’s mobility solutions program in Rwanda was highlighted as a case study. By offering ride-hailing, car-sharing and subscription services, the model provides access to mobility without the need for a large upfront purchase, effectively addressing the affordability issue through a different business model.

Ultimately, African leaders argue a cohesive policy environment is crucial. This includes finalising the AfCFTA’s rules of origin for automotive products, harmonising standards and developing policies that support localisation while simultaneously creating mechanisms for affordable vehicle asset financing. The success of the continent’s automotive industrialisation depends on its ability to navigate the complex interplay between ambition, consumer reality, and economic policy.

https://bit.ly/3V15xIH

Naacam 2025: Strategies for Revitalizing South Africa's Automotive Industry

Against a backdrop of significant industry pressures, key government figures this week committed to tangible interventions aimed at securing the future of South Africa’s automotive components manufacturing sector.

Speaking at the opening of the 2025 National Association of Automotive Component and Allied Manufacturers (Naacam) Show, politicians outlined a multi-faceted approach designed to address immediate threats while positioning the industry for the new energy vehicle (NEV) era.

Nelson Mandela Bay Mayor, Babalwa Lobishe, set a local tone, emphasising the metro's commitment to sustaining existing manufacturers and attracting new investment to the region. Her remarks underscored the critical importance of the sector to the Eastern Cape economy, a point robustly expanded upon by Eastern Cape MEC for Economic Development, Environmental Affairs and Tourism, Nonkqubela Pieters.

MEC Pieters firmly established the province as the cornerstone of South Africa's automotive industry, responsible for exporting over half the country's manufactured vehicles. She pointed to the long-standing presence of major Original Equipment Manufacturers (OEMs) such as Isuzu, Volkswagen and Mercedes-Benz and welcomed the anticipated Stellantis production facility.

However, Pieters did not shy away from the challenges, explicitly citing increased import tariffs, persistent energy supply constraints, and logistical bottlenecks as direct threats to businesses and employment.

"Electricity supply remains the decisive factor in attracting and attaining investment," Pieters says, outlining provincial efforts to diversify the energy mix. These include proposed liquefied natural gas infrastructure development and the accelerated deployment of wind and solar projects.

Furthermore, she detailed plans to enhance freight capacity at the Gqeberha port, finalise a provincial hydrogen strategy, and collaborate with Technical and Vocational Education and Training (TVET) colleges and universities on skills development programmes tailored to the NEV transition.

The national perspective highlighted deeper systemic issues. Minister of Employment and Labour, Nomakhosazana Meth, framed global disruptions as potential opportunities for market diversification into Asia, Latin America and Africa. Yet, she starkly illustrated the sector's fragility by referencing the closure of ArcelorMittal's steel operations in Newcastle and Vereeniging.

"The direct impact is over 3,500 jobs lost in steel production," Meth noted, "with ripple effects across the automotive supply chain potentially pushing total job losses beyond 13 000 in the near term."

While acknowledging a R380-million government lifeline provided through InvestSA and the Industrial Development Corporation, Meth argued for proactive measures. She advocated for a comprehensive steel master plan, built on public-private collaboration, to secure buffer stocks, upgrade mini-mills for OEM-certified steel production, and address underlying competitiveness barriers like energy, logistics, and infrastructure.

To support the NEV shift, Meth confirmed the allocation of R1 billion in state funding aimed at catalysing R30 billion in private investment for local manufacturing projects.

Minister of Trade, Industry and Competition, Parks Tau, presented a sobering analysis of the domestic market. He contrasted 2024’s new vehicle sales of 515 712 units with the South African Automotive Master Plan (SAAM) 2035 target of exceeding 780 000 units. Tau highlighted concerning trends: 64% of vehicles sold domestically are imports, undermining local production, while local content in domestically produced vehicles remains static at 39%, significantly below the 60% SAAM 2035 goal. Compounding this, US tariffs now impact R28,7-billion worth of South African automotive exports.

"These pressures have directly contributed to 12 company closures and over 4 000 job losses within the past two years," Tau says, citing recent production suspensions at Mercedes-Benz and others as symptomatic of industrial value erosion. He stressed that a relatively modest 5% increase in local content could unlock R30 billion in new procurement, far outweighing the potential loss of the R4,4-billion US export market.

Tau detailed specific policy responses. Reforms to the Automotive Production Development Programme Phase 2 (APDP2) are underway, including shifting incentive structures to favour manufacturing over mere assembly.

A critical minerals and metals strategy will prioritise beneficiating platinum group metals, copper, and manganese for high-value NEV components like fuel cells and batteries. Significant tax incentives are also being deployed; the Taxation Laws Amendment Act gazetted in December 2024 introduces a 150% capital allowance for qualifying investments in EV and hydrogen vehicle production assets, applicable between March 2026 and March 2036.

On skills development, Tau confirmed collaborations with Tshwane University of Technology, Cape Peninsula University of Technology, and Unisa to develop new EV manufacturing curricula and certification programmes, culminating in a 100-student pilot project next year. He also reaffirmed commitment to transformation targets, including the SAAM 2035 goal of establishing 130 new black-owned manufacturers.

Addressing the broader investment climate, Tau announced plans for a general laws amendment bill designed to fast-track high-impact investments within 90 days, aiming to reduce red tape. A study via the International Trade Administration Commission (ITAC) will examine the impact of imports on local production.

"Our policy response prioritises offering the carrot, not wielding the stick," Tau concluded, "to attract investment and increase the value-add of our component manufacturers."

The collective message from Gqeberha was clear: the government recognises the severe headwinds facing the auto components sector, from energy instability and logistics failures to global market shifts and job losses.

The pledges made at Naacam 2025 represent a concerted, albeit complex, effort to stabilise the industry through infrastructure investment, policy reform, skills development, and targeted financial support, aiming to navigate the transition towards a more resilient and technologically advanced future. The success of these undertakings will be measured in the coming years by their ability to translate commitment into concrete results on factory floors and in export figures.

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Africa Automotive: Exploring Green Steel in South Africa - A Path to Sustainability

As global industries shift towards greener practices, South Africa is beginning to explore the potential of ‘green steel’—a low-carbon alternative to traditional steelmaking—with interest from both steel producers and automotive manufacturers. 

Image Supplied: ArcelorMittal

Green steel is produced using renewable energy and hydrogen instead of coal, significantly reducing carbon emissions. Given that steel production is a major contributor to global CO₂ emissions, the push for greener alternatives has gained momentum worldwide. In South Africa, where the steel and automotive sectors are key economic drivers, the transition could play a crucial role in maintaining competitiveness, especially as international markets impose stricter environmental regulations. 

Currently, no South African automakers are using green steel in large-scale production, but industry leaders are closely monitoring developments. Companies like Mercedes-Benz South Africa and BMW Group South Africa have committed to sustainability goals, including carbon-neutral manufacturing, which could eventually incorporate green steel. 

Image supplied: ArcelorMittal

On the production side, ArcelorMittal South Africa, the country’s largest steelmaker, has signalled interest in decarbonisation. The company has partnered with renewable energy providers and is exploring hydrogen-based steelmaking, though full-scale green steel production is not yet a reality. Similarly, South Africa’s Industrial Development Corporation (IDC) has highlighted green steel as a priority for future investment, aligning with global trends towards sustainable industrial processes. 

Experts suggest South Africa, with its abundant solar and wind resources, is well-positioned to produce green hydrogen, a key component in green steel manufacturing. However, high costs and infrastructure challenges remain barriers to rapid adoption. 

The transition to green steel is inevitable, but it will require significant investment and policy support but for South Africa to remain a player in global automotive and steel markets, it must accelerate its shift towards sustainable production methods.

While the local industry is still in the early stages, the global push for decarbonisation means green steel could soon become a critical factor in South Africa’s industrial future. For now, automakers and steel producers are watching closely, preparing for a greener transition. 

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Africa Automotive: South Africa's Automotive Industry Faces Production Challenges Amid Global Pressures

The suspension of C-Class sedan production at Mercedes-Benz South Africa's (MBSA) East London plant until late July underscores a deepening crisis within South Africa's vehicle assembly sector, according to Renai Moothilal, chief executive of the National Association of Automotive Component and Allied Manufacturers (Naacam). Moothilal describes production plant volume cuts as increasingly frequent over the past two years.

MBSA confirmed the planned non-production period from 24 June to 30 July, attributing it to sufficient existing stock meeting current demand and standard procedure for volume adjustments. Operations are set to resume on a two-shift basis from 1 August. Naacam indicates component suppliers received advance notice of this specific shutdown.

"This planned closure aligns with patterns observed across the South African vehicle assembly landscape for approximately two years," Moothilal stated. "While uncertainty stemming from US tariff situations presents obvious market issues, the persistent volume reductions pose a significant threat to the business sustainability of component manufacturers."

Naacam has documented numerous local component plant closures and associated job losses directly linked to assemblers failing to achieve the production volumes initially projected when vehicle platforms were launched. "This correlation is clear and has occurred at several assemblers locally since 2023," Moothilal emphasised.

He points to the anticipated 2025 policy review of the government's Automotive Production and Development Programme (APDP), led by the Department of Trade, Industry and Competition, as a critical juncture. Moothilal argues the review must urgently devise mechanisms to shield component companies from the damaging impact of volatile assembly volumes. Currently, vehicle manufacturers receive the largest portion of APDP incentives, including cash and duty rebates tied to assembly volumes and domestic value addition.

"The goals of the South Africa Automotive Masterplan 2035 (SAAM 35) concerning localisation and employment hinge on addressing this imbalance," Moothilal warned. "Failure to do so jeopardises these objectives." When SAAM 35 was drafted between 2016 and 2018, average local content in domestically assembled vehicles stood below 40%, ranging from roughly 30% for high-tech passenger cars to 45% for light commercial vehicles. Moothilal notes that nearly a decade later, this figure remains largely unchanged, despite SAAM 35 targeting 60% local content by 2035. The plan also aims to double employment within the automotive value chain, from about 112 000 to 224 000 people.

Export Reliance and Global Headwinds

MBSA's situation highlights the sector's export dependency. Over 90% of its East London output is shipped to more than 80 global markets, vital as domestic sales for premium brands like Mercedes-Benz have declined sharply. Factors include increased competition from Chinese imports and a consumer shift towards more affordable vehicles.

The parent company, Mercedes-Benz Group, faces its own challenges: a sluggish German economy, potential US tariffs, and surging Chinese competition. The company warned in April of "material impacts" on its financial results if all implemented and announced tariffs remain through 2025.

The European Union, South Africa's largest vehicle export market, presents a mixed picture. While overall EU new car registrations dipped slightly (0.6%) year-to-date until May 2025, battery-electric vehicle (BEV) market share grew to 15.4%. Chinese automakers doubled their EU market share to 5.9% in May 2025 compared to May 2024, demonstrating resilience even amidst new EU tariffs on Chinese EVs by focusing on plug-in and full hybrids. Mercedes-Benz ranked tenth among the top 25 BEV brands in the EU for May, behind Volkswagen (first) and BMW (third), both of which also manufacture in South Africa.

Contrasting African Markets and Local EV Lag

While South Africa contends with production volatility, other African markets show strong growth. Morocco's new car market surged 36.14% in the first half of 2025, selling 112 026 units. Egypt recorded a dramatic 128% year-on-year increase in total automotive sales for May 2025, reaching 14 300 units, with passenger car sales up 98%.

South Africa's automotive sector, contributing 5.2% to GDP (3.2% manufacturing, 2% retail), demonstrated resilience in June 2025 with new vehicle sales climbing 18.7% year-on-year, buoyed by interest rate cuts, controlled inflation, and affordable Chinese imports. However, exports showed signs of strain for major players.

A significant lag remains in electric vehicle adoption. While global EV sales exceeded 17 million units in 2024, growing over 25%, South Africa is a slow starter. Naamsa, the National Association of Automobile Manufacturers of South Africa, is spearheading efforts to build foundational infrastructure. It has commenced work on a national network of 120 publicly accessible EV charging stations along major routes, featuring fast chargers.

Shivani Singh, Naamsa's chief projects officer, highlighted fuel station forecourts as ideal locations due to their traffic, location, and permits. The current scarcity is stark: fewer than 400 public EV chargers compared to 4 800 licensed petrol stations. Timothy Oliver, fuel specialist at Connect Group South Africa, cited capital constraints for diversification and complexities of managing multiple sites as hurdles for retailers.

Naamsa's charging network initiative represents a concrete step towards making EV ownership viable, aiming to replace the unreliable and sparse infrastructure currently available. The success of this infrastructure push, coupled with addressing the fundamental challenges of assembly volume stability and localisation incentives highlighted by Naacam, will be crucial for the future sustainability and growth of South Africa's critical automotive industry.

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Continental Auto Industry Gathers Momentum Amidst Trade Push, SA Exports Hold Steady

Johannesburg, a historical nexus of commerce and ambition, recently hosted pivotal discussions framing Africa’s automotive future. The gathering served as a precursor to the Africa Automotive Show, integrated within the larger Intra-African Trade Fair (IATF2025), scheduled for Algiers, Algeria, between 4 and 10 September 2025. 

This event is positioned as a critical driver for continental economic integration under the African Continental Free Trade Area (AfCFTA), even as specific challenges, including the noted closure of South Africa's Goodyear tyre factory, underscore persistent hurdles. 

Representatives from the African Export-Import Bank (Afreximbank) and the South African government emphasised the urgent need to translate policy into tangible trade. Afreximbank executives highlighted a fundamental barrier: not tariffs or logistics, but a deficit in actionable market intelligence. 

Illustrative cases were stark: Tunisia, Morocco, and South Africa collectively import over $400 million in leather goods annually from outside Africa, despite significant production capacity in Ethiopia, Kenya, and Sudan. Similarly, West African nations spend upwards of $3 billion importing meat from distant markets like Argentina and Australia, overlooking potential suppliers including Mali, Namibia, Chad, Sudan, Botswana, South Africa, and Zambia. 

"This isn't about capacity," Humphrey Nwogo, Regional Director, Southern Africa for Afreximbankl stressed. "The problem is connectivity. The problem is lack of information." 

These imbalances represent missed chances for job creation, value addition, and economic diversification continent-wide. Assembly operations at the Toyota plant in Prospecton, Durban 

The IATF, now formally designated by the African Union (AU) as the AfCFTA's commercial face and integrated into its framework, is seen as the strategic tool to bridge this gap. Its relevance was affirmed at the 2024 AU Summit, where heads of state acknowledged its role in facilitating cross-border agreements. 

South African Context: 

Exports and ImperativesAgainst this backdrop, South Africa's role in the continental vehicle manufacturing landscape remains significant. According to the latest figures from naamsa | The Automotive Business Council, the country produced approximately 515 000 vehicles during 2024. Combined with substantial output from North African nations, primarily Morocco and Egypt, total continental production reached an estimated 1,2-million units. 

This starkly contrasts with minimal output from West, Central, and East Africa, highlighting significant growth potential. 

"These figures demonstrate the existing industrial base concentrated in the north and south," says Nwogo. "The potential for replication and expansion into other African regions is immense. 

Achieving a continental output target of 5-million units is a feasible ambition underpinned by the AfCFTA." 

However, South African officials acknowledged hurdles hindering deeper integration. Deputy Minister of Public Works and Infrastructure, Sihle Zikalala, pointed to logistics constraints and skills gaps impacting cost-competitiveness for South African exports elsewhere in Africa. 

He cited the example of a Tunisian colleague driving a vehicle manufactured in Thailand rather than South Africa. "That’s why we are in this room," Zikalala remarked, underscoring the need for the AfCFTA to address these frictions. 

Beyond Assembly: The Skills Imperative

The discussion extended beyond mere vehicle assembly to encompass the entire value chain and skills ecosystem. Industry experts emphasised that sustainable growth requires equipping markets with the technical and soft skills needed to service and maintain vehicles post-sale. 

The African Association of Automotive Manufacturers (AAAM) highlighted its Skills Development Working Group, focusing on building capacity from artisan levels to policy-making echelons. Initiatives include executive short courses for trade officials and practical exposure within manufacturing plants, aiming to foster informed policy development and local job creation alongside industrialisation.  

Kenya Positions for AfCFTA Gains

Echoing the continent-wide focus, Kenya used its own IATF2025 roadshow to position itself as a trade, industrial, and innovation hub. Cabinet Secretary for Investments, Trade and Industry, Hon. Lee Kinyanjui, stated, "The solutions to Africa’s problems lie with Africans. It is essential for countries within the continent to strengthen intra-African trade... 

With a well-educated population, abundant resources, and banks ready to finance investment, Africa has what it takes to elevate itself to the next level." Afreximbank's Executive Vice President, Haytham Elmaayergi, reiterated the information gap challenge at the Kenyan event, using the leather import example, and spotlighted Kenya’s digital innovation sector as having significant export potential under the AfCFTA. 

As nations prepare for Algiers 2025, the focus remains on harnessing regional value chains, accelerating industrialisation, and overcoming informational and infrastructural barriers. The Africa Automotive Show within the IATF stands as a pivotal marketplace and catalyst for converting the AfCFTA's promise into tangible commercial progress across the continent, with South Africa's established export capacity poised to play a key role amidst ongoing domestic challenges. https://bit.ly/4l644vI