• South Africa is overhauling its automotive policy to strengthen local manufacturing and growth.
• The review includes tariff changes, battery manufacturing plans, and fiscal measures.
• The auto sector faces pressure from global competition and trade uncertainty.

South Africa is conducting a comprehensive review of its automotive policy to stimulate local production, address structural challenges, revive the sector, and support faster growth. The announcement was made by Mkhululi Mlota, director general for automotive at the Department of Trade, Industry and Competition, during a parliamentary committee hearing on Tuesday, January 27.

Mlota said the review will include intergovernmental fiscal commitments, which are expected to begin in the coming days. Authorities are also examining a set of proposals aimed at revitalizing the sector. These include a review of the customs tariff structure, the development of a battery manufacturing policy, efforts to attract new vehicle manufacturers, and a revision of the ad valorem tax on light vehicles.

Mlota said the goal is to build a transformed and globally competitive industry that contributes to the sustainable development of South Africa’s productive economy, while creating prosperity for industry players and society as a whole.

South Africa’s automotive industry has faced multiple challenges since the adoption and implementation of the Automotive Master Plan in 2021, according to the authorities. These include the Russia-Ukraine war, rising competition from China as a producer of more affordable, high-technology vehicles, and US tariff measures. Persistent uncertainty has also weighed on the sector, as the United States is South Africa’s third-largest automotive export market. Vehicle exports to the US reached 28.7 billion rand, or about $1.8 billion, in 2024, based on government data.

Under its Automotive Industry Master Plan to 2035, South Africa aims to deepen local component integration while improving the sector’s global competitiveness. The plan targets a doubling of employment in the industry and an increase in South Africa’s share of global vehicle production to 1%. This ambition is supported by an expected rise in the share of locally produced components to 60%, up from about 40% currently.

According to the National Association of Automobile Manufacturers of South Africa, Morocco became Africa’s leading vehicle producer in 2025, overtaking South Africa, which had previously held the top position.

Lydie Mobio