It was in 1981 that I started writing about the South African motor industry, as editor of a motor trade publication, MotorWorld. By 1982, I was predicting its demise — the maths did not work out in terms of the size of the South African market and the volumes being produced.
They still don’t. According to Naamsa, the Automotive Business Council (which is now 90 years old), South Africa’s share of global vehicle production was 0,65% in 2024, ranking us at number 21. We do better on bakkies and are ranked 15th, with a global market share of 1,05%. Local sales in 2025 were 515,850 units, or 0,56% of the world new vehicle market of 92 million vehicles.
My question then (and now) is why would the managing director and board of the likes of Volkswagen, Mercedes-Benz, Stellantis, Ford or BMW bother to spend any time on such a small market — to the point of regularly getting on an aeroplane and visiting the facilities?
General Motors management upped and left, and there has been no real Chinese investment despite many promises and concessions by the government and its agencies, so we are left largely with the European manufacturers keeping our industry alive.
Shut down
There is nothing permanent about a vehicle plant. Their life is that of a model (work on eight years maximum), after which they either have to be refitted or shut down.
Australia last made motor cars in October 2017, followed by New Zealand in 2020. More recently, Nissan plans to close three factories within the next two years (one of which is likely to be in South Africa), Volkswagen in October 2024 announced plans to shut down “at least” three of its German plants, and Stellantis has “paused” production at Canadian and Mexican auto assembly plants due to US President Donald Trump’s tariffs.
When a motor assembler closes, the supply sector follows. Automotive suppliers are totally dependent on a particular range or model, with their machinery designed to manufacture only the components for which they have been contracted at a global level — few purchasing decisions are made in South Africa.
Hence, their business model is to amortise the investment and hopefully make some money by the time the contract runs out — being awarded the contract to supply the next model is a bonus (and will probably require a new production line, or retooling at the least).
And yet we have Volkswagen investing in a new model developed jointly by the company’s plants in Brazil and South Africa, and Stellantis is planning to build a factory in the Coega Special Economic Zone.
Fortunately for the people of the Eastern Cape and South Africa as a whole, there has been a succession of industry leaders who have defied or ignored the maths and kept the industry alive. This includes those who kept automotive manufacturing alive during the sanctions era.
MotorWorld long ago joined the media scrapheap, but I have managed to continue writing about the industry. Through this I have had the privilege of meeting many of the managing directors, managers, engineers, union leaders and workers, and now know that passion beats numbers.
High flyers sent here for three to five years as part of their progress up the global corporate ladder leave as champions of the province and the local industry. We make good cars, and thanks to government incentives, we can make them profitably (most of the time).
Those government incentives did not come easily. Industry leaders put in hundreds of hours to convince the Department of Trade, Industry and Competition that the motor industry is supported by governments around the world, and the only way to stay competitive is through incentives.
In return, the industry invested R7,3-billion in upgrades and new manufacturing capacity in 2024 (which is pretty much the yearly average), according to Naamsa.
Vital point
Detractors point out that automotive manufacturing accounts for just 3,2% of South Africa’s gross domestic product, and argue that the incentives given to the sector could be better spent. That misses a vital point. Without the motor industry we would not be globally competitive in robotics, mechatronics, programming, logistics and tool making (which is in decline).
Our ports would be less busy, which means it would be more difficult and expensive for other industries to import and export.
To conclude, here are some more numbers: according to Naamsa, the automotive assemblers employed 33,209 people in the first quarter of 2025.
It is estimated that each of these jobs supports another 13 to 14 entrepreneurs and workers in various industries, putting automotive-related employment at about half a million. And for that we have to thank the visionaries who have put people ahead of numbers.
In the hugely competitive global automotive market keeping the factory doors open is an exceptionally fine balancing act, and one that has to be fought for in boardrooms in Europe, Japan and the US — far away from the action.
Local, provincial and national governments level the playing field (or not) through reliable power, safety, education, water, logistics and lifestyle options. Workers and management must then ensure that they combine forces to be a winning team.
No one else in the world cares if the Eastern Cape and South African automotive industry go the same way as those in Australia and New Zealand. The world makes more cars than there are buyers. But for South Africa, and particularly the Eastern Cape, there is a lot on the line. DM