• Mahindra & Mahindra is considering a CKD assembly plant near Durban to strengthen its presence in South Africa.

• South Africa’s auto market grew 15.7% in 2025 to 596,818 vehicles, marking a post-pandemic recovery.

• Rising competition from Chinese automakers is intensifying pressure on international players.

Indian manufacturer Mahindra & Mahindra currently evaluates the installation of a "completely knocked down" (CKD) production line at its site near the port city of Durban. This strategic shift means the company will ship full vehicle kits to South Africa for complete local assembly.

The new manufacturing hub represents a significant departure from the model the company established in 2018. Since that time, the firm has utilized a "semi-knocked down" (SKD) scheme where workers receive large, pre-assembled sub-sections from India.

Bloomberg reported these developments citing anonymous sources. The Indian giant maintains active discussions with the Industrial Development Corp (IDC) to determine the feasibility of the project. This partnership with the state-owned development finance institution highlights the company's intent to deepen its local footprint.

Mahindra & Mahindra intends to capture the growing demand for affordable vehicles. The mid-range segment in South Africa currently experiences a significant boom. While the brand already maintains a strong position with its popular "Pik Up" model in rural areas, it now seeks to become a long-term industrial partner for South African authorities. This move aligns with national goals to attract investment into the dynamic manufacturing sector.

Market data supports this expansion strategy. The South African automotive market reached 596,818 new vehicle sales in 2025. This performance represents a 15.7% increase compared to 2024 and exceeds pre-pandemic volumes. Passenger cars drove this recovery, as sales jumped 20.1% to reach 422,292 units. Furthermore, the National Association of Automobile Manufacturers of South Africa (Naamsa) predicts a further 9% to 11% increase in registrations for 2026. Falling inflation and gradual monetary easing provide the primary catalysts for this optimistic forecast.

A Competitive Market

This project forms part of a broader corporate strategy to counter intense competition from Chinese manufacturers. Chinese firms currently face price wars in their domestic market and rising trade barriers in Europe and the United States. Consequently, these manufacturers have increased their offensive in South Africa.

Nearly fifteen Chinese brands now operate within the country through various assembly or distribution channels. These companies compete directly with established giants such as Volkswagen, Toyota, and Mercedes-Benz.

Recent industry moves highlight the scale of this competition. Chinese automaker Chery signed an agreement in April to take over the Nissan plant in Rosslyn, near Pretoria. This acquisition grants Chery control over a historic site that produced pickup trucks for nearly sixty years. Chery South Africa will assume control of the land, buildings, and equipment by mid-2026. The company intends to use this industrial capacity to serve the local market and the wider Southern African region.

This article was initially published in French by Espoir Olodo

Adapted in English by Ange J.A de Berry Quenum