SA’s automotive sector at a crossroads
SA’s automotive sector at a crossroads
Urgent reforms can help secure the automotive industry’s long-term competitiveness.
South Africa’s automotive industry, one of the country’s most important economic pillars, is facing a decisive moment as progress under the South African Automotive Masterplan (SAAM) falls behind its strategic targets.
This is according to the BDO SA Research Report: SA Automotive Sector 2024/25, which evaluated the sector’s progress and highlights urgent reforms needed to secure its long-term competitiveness.
In 2024, the automotive sector contributed 5.2% of the country’s GDP, supported over 110,000 direct manufacturing jobs, and accounted for 22.6% of total manufacturing value addition. When including the retail motor trade, the industry employed more than 300,000 people across approximately 23,000 establishments, making it one of the country’s most strategically significant industries.
Falling short of targets
The report reveals a widening gap between SAAM’s 2035 vision and current delivery.
BDO SA automotive sector lead Siyabonga Mthembu says the credibility of the 2035 vision now hinges on how quickly existing policies are implemented.
Production data highlights the scale of the challenge. SAAM set a target of 784,509 vehicles by 2025, but actual output reached only 599,755 units in 2024, while the first 11 months of 2025 recorded 554,613 units.
The shortfall contributed to a 22.8% decline in automotive exports in 2024.
Localisation targets are also under pressure, with current levels between 38% and 42%, below the 48.2% target for 2025.
Supplier transformation is stalling
Employment in the sector currently sits at roughly 115,000 workers, less than half the 224,000 jobs SAAM aims to support by 2035.
Over the past two years, 12 component manufacturers have closed, resulting in more than 4,000 lost jobs.
Transformation remains the weakest-performing pillar, with slow progress toward supplier diversity targets.
Infrastructure: the sector’s most critical constraint
Port congestion is extending export lead times by up to 40%, while declining rail capacity and energy instability are increasing costs.
These challenges are particularly severe in the Eastern Cape, where much of OEM production is concentrated.
EV deadline closer than it seems
The transition to electric vehicles adds urgency, as key export markets phase out internal combustion engines between 2030 and 2035.
Barriers include import duties, uncertain resale values, and energy supply concerns.
Priority interventions
South Africa’s automotive industry, one of the country’s most important economic pillars, is facing a decisive moment as progress under the South African Automotive Masterplan (SAAM) falls behind its strategic targets.
This is according to the BDO SA Research Report: SA Automotive Sector 2024/25, which evaluated the sector’s progress and highlights urgent reforms needed to secure its long-term competitiveness.
In 2024, the automotive sector contributed 5.2% of the country’s GDP, supported over 110,000 direct manufacturing jobs, and accounted for 22.6% of total manufacturing value addition. When including the retail motor trade, the industry employed more than 300,000 people across approximately 23,000 establishments, making it one of the country’s most strategically significant industries.
Falling short of targets
The report reveals a widening gap between SAAM’s 2035 vision and current delivery.
BDO SA automotive sector lead Siyabonga Mthembu says the credibility of the 2035 vision now hinges on how quickly existing policies are implemented.
Production data highlights the scale of the challenge. SAAM set a target of 784,509 vehicles by 2025, but actual output reached only 599,755 units in 2024, while the first 11 months of 2025 recorded 554,613 units.
The shortfall contributed to a 22.8% decline in automotive exports in 2024.
Localisation targets are also under pressure, with current levels between 38% and 42%, below the 48.2% target for 2025.
Supplier transformation is stalling
Employment in the sector currently sits at roughly 115,000 workers, less than half the 224,000 jobs SAAM aims to support by 2035.
Over the past two years, 12 component manufacturers have closed, resulting in more than 4,000 lost jobs.
Transformation remains the weakest-performing pillar, with slow progress toward supplier diversity targets.
Infrastructure: the sector’s most critical constraint
Port congestion is extending export lead times by up to 40%, while declining rail capacity and energy instability are increasing costs.
These challenges are particularly severe in the Eastern Cape, where much of OEM production is concentrated.
EV deadline closer than it seems
The transition to electric vehicles adds urgency, as key export markets phase out internal combustion engines between 2030 and 2035.
Barriers include import duties, uncertain resale values, and energy supply concerns.
Priority interventions
- Recalibrate SAAM targets to reflect industry realities
- Adopt a flexible new energy vehicle strategy
- Modernise infrastructure with private-sector support
- Strengthen supplier development and expand African trade opportunities.