--- title: "SA carmakers are tired of waiting for the love" description: "Our automakers are not feeling the love that an industry representing 5% of the country’s GDP should be feeling, and they’re running out of patience." type: "NewsArticle" publisher: "Daily Maverick" site: "https://www.dailymaverick.co.za" section: "AUTOMOTIVE INDUSTRY" author: "Lindsey Schutters" author_url: "https://www.dailymaverick.co.za/author/lindsey-schutters-2/" canonical_url: "https://www.dailymaverick.co.za/article/2026-09-03-sa-carmakers-are-tired-of-waiting-for-the-love/" published: "2026-09-03T22:09:56" lang: "en-ZA" word_count: 1256 --- # SA carmakers are tired of waiting for the love > Our automakers are not feeling the love that an industry representing 5% of the country’s GDP should be feeling, and they’re running out of patience. By Lindsey Schutters · Published 4 September 2026, 00:09 SAST ## Key points - South African automakers are frustrated by two-year delays over the Automotive Production and Development Programme Phase 2 and weak government procurement that favours cheap imports, risking investment. - Faster, policy-driven competitors like Morocco attract capital; global allocation is agnostic, and South Africa struggles on speed and certainty. Industry demands a level playing field: no temporary SKD concessions, stronger anti-dumping protections, and buy-local procurement to protect jobs. - New energy vehicle sales are surging, but export headwinds (US tariffs) and lack of EV infrastructure/fuel standards threaten future investment and jobs. ## Content In a candid interview with Daily Maverick, Ford Motor Company Africa’s president, Neale Hill, warned that South African automakers face direct global competition from manufacturing hubs like Thailand, Argentina, and North America when bidding for capital allocation. [For context Long battle for SA carmakers to reach top of the pile again July 19, 2026 ![Image](https://cdn.dailymaverick.co.za/i/zXxsF_bsEeW5dIvrTXVffjtfFLE=/450x0/smart/file/attachments/2995/17172693_160499.jpg)](https://www.dailymaverick.co.za/article/2026-07-19-long-battle-for-sa-carmakers-to-reach-top-of-the-pile-again/) “South Africa’s benevolence as a rainbow nation has unfortunately expired,” said Hill, emphasising that capital remains completely agnostic to location. That reality – combined with Morocco’s proximity to Europe across the Strait of Gibraltar – explains why the North African country has eclipsed South Africa as the continent’s top automaker. The other critical factor is speed. Hill noted that South Africa’s automotive industry has been in discussions with the Department of Trade, Industry and Competition since 2024 regarding the review of the Automotive Production and Development Programme Phase 2 ([APDP2](https://www.sars.gov.za/customs-and-excise/registration-licensing-and-accreditation/automotive-production-and-development-programme-apdp/)). Two years later, they remain stuck in the discussion phase. “We shouldn’t be in discussion phase two years later … we’ve wasted 24 months.” He compares this to Morocco’s deliberate intent, speed and agility in policy changes. ### **Buying local** The Ford man reserves most of his venom for a biting criticism of the government’s procurement record, noting that despite being the largest fleet operator in the country, the government does not adhere to a “buy local first” policy. Many vehicles imported from China are appearing on government fleet buying lists. Only recently were selection parameters updated to include local manufacturing, but the allocation is heavily skewed: 90% is based on price, 5% on local production, and 5% on BBBEE compliance. Don’t get him started on [Goodyear’s plant closure](https://www.engineeringnews.co.za/article/goodyear-plant-closure-comes-on-the-back-of-massive-pressure-build-up-nmb-business-chamber--2025-06-13) in Kariega. Hill places the blame squarely at the government’s door for failing to protect domestic manufacturers, pointing out that Goodyear chose to shut down its local factory and import instead after the state allowed cheap, dumped tyres from China and India to flood the market. ![The Goodyear manufacturing plant in Kariega, Nelson Mandela Bay will be shutting down. (Photo: Justin Sullivan / Getty Images)](https://cdn.dailymaverick.co.za/i/bIE9kM9kAvwQrteREiKiRkTcDyg=/200x100/smart/filters:strip_exif\(\)/file/dailymaverick/wp-content/uploads/2025/06/GettyImages-86280857.jpg) *The Goodyear manufacturing plant in Kariega closed down on 15 August 2025. (Photo: Justin Sullivan / Getty Images)* This is where it gets interesting. Daily Maverick [previously reported](https://www.dailymaverick.co.za/article/2026-07-19-long-battle-for-sa-carmakers-to-reach-top-of-the-pile-again/) on Ford’s views on Chery taking up residence on the other side of Pretoria, and Hill clarified the company (and general industry) position: > “We welcome competition… Ford established the local manufacturing industry in South Africa and has faced disruption before… It’s got to be done on an equal playing field... There can only be one set of rules.” It’s a sensible stance to take when you consider that manufacturers like Ford operate completely knocked-down (CKD) plants, requiring deep localisation, and must maintain a Level 4 BBBEE status. This introduces significant compliance costs. New entrants must not receive temporary semi-knocked-down (SKD) licences or concessions that excuse them from their localisation and transformation requirements. ### **Wrong end of the incentive stick** In July, some sections of South African society, led by [wild claims](https://newsday.co.za/business/21276/vat-could-be-cut-from-15-to-12-in-south-africa-with-one-change/) by trade analyst Donald MacKay, suggested that abolishing the APDP could help Treasury reduce VAT from 15% to 12%. This prompted the Automotive Business Council, Naamsa, to issue a lengthy statement clarifying that the APDP does not involve physical cash payouts from the National Treasury. The programme operates on a duty-offset system: South Africa levies customs duties on imported vehicles and parts to encourage localisation, and manufacturers that invest locally and add local value earn credit rebates to offset those import duties. If local manufacturing were abolished, there would be no duties to rebate, no local value to reward, and far less economic activity to tax. It is a self-funding investment programme, not a cost to the fiscus. > **Wait, how much does APDP bring in?** > > The core of the argument for abolishing APDP is the R35-billion to R40-billion in customs rebates and production support. > > But, according to Naamsa data, in 2025 alone, the automotive industry generated R137-billion in audited Local Value Addition (LVA) within South Africa's borders. > > The industry also supported R270.8-billion in automotive exports (with total vehicle/component exports reaching a record R291-billion). > > Purely on these two metrics, every R1 of duty rebate under the APDP supports nearly R4 in domestic manufacturing value and almost R8 in national export earnings. > > This excludes the massive downstream taxes collected via corporate income tax, employee PAYE, and VAT throughout the automotive supply chain. Then there are the complications caused by the Trump tariffs and the effects of inflation on the budgets of ordinary South Africans, which collapsed demand and affected jobs. Hill maintains that the Ford job cuts were triggered by the drop in demand and not by investments in automation. While Q1 2026 employment held stable (+27 jobs vs December 2025), the production slump forced manufacturers to shed jobs in Q2. As of June 2026, aggregate industry employment stood at 31,675 – a net loss of 230 manufacturing jobs in a single quarter. [Media](https://cdn.dailymaverick.co.za/attachments/2997/SouthAfricaNEVSalesQ22026DailyMaverick_325045.pdf) But a massive positive development is the accelerating consumer adoption of New Energy Vehicles (NEVs). Driven by new brand entrants starting to report sales data, NEV sales in Q2 2026 skyrocketed by 134.3% to reach 8,611 units (comprising 5.6% of the total vehicle market, breaching the crucial 5% barrier for the first time in South Africa). Traditional hybrids led the volume with 3,912 units, followed by plug-in hybrids at 3,346 units, and pure electrics at 1,353 units. Capitalising on these trends will need more investment in new tooling and production lines, and establishing a new supplier network. [Read more: Ford South Africa wields business optimisation sword, affecting 474 jobs August 29, 2025 ![Image](https://cdn.dailymaverick.co.za/i/JF0prPSPisRgGfEninnxTrKWjcI=/450x0/smart/file/dailymaverick/wp-content/uploads/2025/08/First-Next-Gen-Ranger-in-Silverton-Plant-6.jpg)](https://www.dailymaverick.co.za/article/2025-08-29-fords-workforce-reductions-reflect-broader-challenges-and-uncertainty-in-sas-automotive-sector/) ### **Dancing with the devil** On 8 August 2026, the US Senate successfully extended the Agoa trade treaty through to 31 December 2028, aligning the framework with the current US presidential term. The two-year extension preserves duty-free access for the 32 eligible sub-Saharan African countries (including South Africa), though the Bill still awaits final concurrence in the House of Representatives and the president’s signature. The core pitfall of the current trade environment is that the 2028 extension does not restore economic certainty for South African auto manufacturers because of ongoing US protectionist tariffs. Trump’s 25% [Liberation Day tariffs](https://en.wikipedia.org/wiki/Liberation_Day_tariffs) completely overwhelmed and nullified the 2.5% Agoa duty concession last year. As a direct consequence, South African vehicle exports to the US collapsed by 83.2%, plummeting from 24,682 units in 2024 to a mere 4,136 units in 2025. ![President Donald Trump holds up a chart while speaking during a “Make America Wealthy Again” trade announcement event in the Rose Garden at the White House on April 2, 2025 in Washington, DC. Touting the event as “Liberation Day”, Trump is expected to announce additional tariffs targeting goods imported to the U.S. (Photo: Chip Somodevilla/Getty Images)](https://cdn.dailymaverick.co.za/i/VoDydySETZNvEUpih24SDNDhbPY=/200x100/smart/filters:strip_exif\(\)/file/dailymaverick/wp-content/uploads/2025/04/GettyImages-2208184612.jpg) *Donald Trump holds up a chart of tariffs on ‘Liberation Day’, 2 April 2025. (Photo: Chip Somodevilla / Getty Images)* The adoption of the AfCFTA automotive [rules of origin](https://aaamafrica.com/f/afcfta-rules-of-origin-for-the-automotive-sector-approved) in February has opened up massive regional integration opportunities. With 85.1% of South Africa’s vehicle and component exports in 2025 destined for the SADC region, the African Continental Free Trade Area (AfCFTA) is seen as a vital mechanism to diversify exports and develop a regional automotive value chain. This doesn’t solve government inaction in adopting future-facing fuel regulations or accelerating EV charger availability and carbon emissions-linked tax incentives. “We produce Euro 6 cars in Silverton and export them out of the country … the technology exists,” laments Hill. South Africa is restricted to less efficient cars that use Euro 4 fuels because the state cannot guarantee consistent fuel quality across the country. Hill warns that while attracting new capital is positive, government policy must focus heavily on retaining existing investors who have deep capital bases: > “It’s one thing to attract investment. Got to keep the ones that are here. Otherwise, it’s just a leaking bucket... You don’t want a revolving door of capital.” When articulated like that, the existing car manufacturing industry makes a strong case for not feeling loved. **DM**