Durban:The South African government's dedication to localisation, transformation, and the transition to new energy vehicles (NEVs) was emphasized at the South African Auto Week in Durban. Trade, Industry, and Competition Minister Parks Tau highlighted the government's vision for a prosperous and sustainable future for the automotive sector during the event's opening session.
According to South African Government News Agency, Tau outlined a strategy where transformation and competitiveness coexist without tension. He emphasized the importance of a robust local supplier base, noting that each imported component manufactured locally creates opportunities for new suppliers, investments, and jobs within the country.
The South African Auto Week serves as a platform for dialogue between industry leaders and policymakers, aiming to shape regulatory frameworks, support local manufacturing, and address sector challenges. Tau assured attendees that the government is implementing measures to support transformation and localisation, ensuring that emerging companies, particularly those owned by previously disadvantaged citizens, are included in the NEV transition.
Tau also stressed the importance of the ongoing review of the Automotive Production and Development Programme 2 (APDP2), which is designed to guide the sector under the South African Automotive Masterplan (SAAM 2035). The programme includes a 150% investment allowance for qualifying investments in electric and hydrogen vehicle production, alongside support from various development finance institutions.
However, Tau acknowledged the challenges faced by the sector, including pressure from imports, high energy and logistics costs, and reduced demand. To address these issues, the government is promoting the Africa Automotive Pact to enhance market diversification and growth under the African Continental Free Trade Area (AfCFTA).
In 2023, the South African automotive industry recorded R270.8 billion in revenue from vehicle and component exports, marking a 19.1% increase from the previous year. The industry exported 25,381 vehicles to African countries, indicating potential for further growth facilitated by the AfCFTA.
The South African Auto Week is hosted at the International Convention Centre in Durban, organized by the National Association of Automobile Manufacturers of South Africa and the Automotive Business Council, in collaboration with the KwaZulu-Natal Provincial Government and the Department of Trade, Industry and Competition.