Imports, failing infrastructure and ‘government indecision’ threaten SA automotive industry

Speakers at SA Auto Week were forced to bat defensively as they responded to sharp criticism from a key roleplayer in the local automotive sector.

Nelson Mandela Bay deputy mayor Gary van Niekerk responded to sharp criticism from manufacturers on the Nelson Mandela Bay municipality’s inability to provide reliable basic services.

This came after comments the day before that ailing road infrastructure, unreliable water and electricity supply and security concerns were putting into jeopardy the future of the automotive sector in the Bay. 

In turn, trade and industry minister Parks Tau bore the brunt of Numsa’s critique that the sector was “bleeding jobs” due to a lack of decisive leadership from the government.

The union’s secretary general, Irvin Jim, lambasted government officials for not having better control over the import of foreign products, particularly Asian and Indian vehicles, at the cost of the local manufacturing workforce.

Tau tried to reassure those at the fourth annual Auto Week that the future of the automotive industry in South Africa was secure and that talks were ongoing to ensure foreign brands used local labour more effectively.

The three-day event, hosted by the automotive business council Naamsa at the Coega Vulindlela Village and Conference Centre, saw a variety of automotive stakeholders showcase some of their latest and most innovative products while also participating in discussions revolving around South Africa’s place in the global sector, and the sector’s future.

Tau described the automotive industry as “one of the cornerstones of South Africa’s economy”. 

In 2024, the industry contributed more than 5.2% to SA’s GDP and accounted for 22.6% of the country’s total manufacturing output. 

Vehicle and component exports equated to R268.8 billion – 15% of SA’s total exports to 155 global markets.

“The industry provides nearly 500,000 formal jobs across assembly, components, retail, and services — and supports around one million jobs across the value chain,” Tau said.

However, much of the positive conversation was overshadowed by the ongoing theme of concern for the automotive sector in South Africa, particularly growing threats to job security and Nelson Mandela Bay’s attractiveness (or lack thereof) to global investors. 

“Over the past two-and-a-half years, this industry has been bleeding jobs,” Numsa’s Jim lamented.

He said five of seven OEMs had suffered job losses, which inevitably filtered down to the vast network of component manufacturers – 12 of which have closed their doors in recent months.

This had resulted in 4,000 workers losing their livelihoods.

As a further example, Jim referred to the closure of the Goodyear plant in Kariega (formerly Uitenhage), which resulted in the loss of 900 jobs.

‘Tyre dump’

However, he intimated that this could have been avoided if the government had intervened in the so-called “tyre dump” that has seen imports severely damage sales of locally produced products.

The dump, according to Jim, is not only in the form of new tyres coming into the country, but also those already fitted to vehicles imported into the country. 

He said the government had to be bold enough to ban the importation of foreign tyres in favour of local products – a policy that could potentially have saved Goodyear.

In 2018, Chinese and Indian imports accounted for 1% of the SA automotive sector. In 2025, that figure had climbed to 26%.

“Our government must act decisively to promote local manufacturing and drive meaningful localisation.

“Workers are not losing jobs because they are lazy or unskilled. They are losing jobs because government policy has been distorted in favour of traders and importers,” Jim said.

He called on the government to implement regulations that would see foreign brands forced to manufacture locally and employ South Africans.

Tau said his response on the matter was “inspired” by Jim’s call to the government.

He said discussions were ongoing to convert existing SKD manufacturing (semi-knocked down) into CKD manufacturing (completely knocked down).

This means that where vehicles currently arrive in SA partially assembled and need only to be bolted together to form a finished product, they will arrive completely unassembled so that local labour can put them together from scratch and draw on SA’s local production capabilities.

While the future of the automotive industry remained central to all discussions at Auto Week, questions around Nelson Mandela Bay’s position as one of the industry hubs were much debated.

The previous day saw several roleplayers, including Billy Tom, CEO of Isuzu Trucks SA and Naamsa president, criticising the local council for the lack of crucial infrastructure maintenance.

Issues around reliable water and energy supply and road infrastructure, as well as safety and security, were the main concerns raised by stakeholders.

While Nelson Mandela Bay mayor Babalwa Lobishe responded to some of the concerns on the day, deputy mayor Van Niekerk provided further response during his welcoming address in Lobishe’s stead on day two.

“We are mindful of the challenges the industry has raised. You have called for improved services and stronger security, and we have heard you. Businesses and communities alike need dependable road repairs, reliable electricity, well-maintained stormwater infrastructure and safer environments. These are not small concerns; they are daily realities.”

Van Niekerk said the local council passed an important item earlier in the week to establish a dedicated “Project Management Unit” that would be the driving force to ensure that critical concerns were prioritised and efficiently addressed.

“This metro will be the place where the roads are strong, the lights stay on, the water flows, and communities and businesses feel safe. It will be the place where government and industry stand side by side, building prosperity brick by brick.

“Invest in us, partner with us, believe in us. Because together, we will not only drive the future of the automotive industry, we will shape the future of Africa,” Van Niekerk said. DM