South Africa’s car industry went from R60 billion to R130 billion in 5 years

The value of South Africa’s automotive industry more than doubled between 2020 and 2025, growing from under R60 billion to more than R120 billion in five years.

This was confirmed by the Automotive Business Council (Naamsa) in response to comments made by Trade, Industry and Competition Minister Parks Tau.

The minister was responding to a parliamentary question by EFF MP Thokozani Langa regarding the progress of South Africa’s Automotive Masterplan.

According to the minister, the plan had so far failed to achieve its major targets, as in 2015 local content accounted for just 38.7% of South Africa’s assembled vehicles market.

He added that, since then, there has been a negligible and lacklustre performance in terms of realising the Masterplan target of 60% by 2035.

The minister quoted Naamsa’s Industry Customs Account Quarter 3 of 2025 statistics, revealing that current local content is sitting at 38.1%.

“More needs to be done to realise the set local content target by 2035, including localisation broadly,” he added.

Tau explained that a review of the Masterplan is currently underway, with the intention to address some of the challenges still impeding its success.

Responding to the minister’s comments, Naamsa revealed that the value of local content in South Africa’s automotive industry had actually risen from R57.2 billion in 2020 to R126.8 billion in 2025.

During this time, the local value share of the automotive sector remained relatively stable, around 39.7%, according to Naamsa.

Naamsa Chief Policy Officer Tshethle Lithoko told 702 that this had been driven mostly by bakkie manufacturing, thanks to the higher premium that they demand.

He explained that because cars produced in South Africa hold a certain class and market value, they drive up the local content value, even as the local value share remains relatively unchanged.

Battling an influx of cheap imports

South Africa’s automotive industry is facing a massive influx of cheap vehicle imports from emerging markets like China and India, with sector stakeholders raising concerns that it could harm the country’s vehicle manufacturing.

According to Naamsa, locally produced cars accounted for approximately 52% of all car sales in South Africa in 2020, while imports made up the other 48%.

This dynamic has since shifted, and imports now constitute around 60% of all new car sales in South Africa, while locally manufactured cars sit at only 40%.

Lithoko noted that this is more relevant to entry-level or budget vehicles, and not necessarily to the bakkies and SUVs built locally.

“We are not competing in the market at the same vehicle classes for the cars that we are importing versus the cars that we are producing,” he explained.

“Where there is an influx of cars in the same classes, you would then find that market leadership is still maintained with locally produced vehicles.”

Lithoko also added that the majority of vehicles produced in South Africa are exported to other countries, with 80% of these shipped to Europe.

One of the Automotive Masterplan’s main goals is for South Africa to account for 1% – around 900,000 units – of the world’s vehicle production by 2035.

Last year, South Africa produced more than 600,000 vehicles, which means the country is around two thirds of the way to its manufacturing target.

Lithoko said for South Africa to increase its competitiveness and reach this goal, policy alignment is critical.

“The cars that we produce in South Africa are, on price alone, at least 15% on average at a disadvantage to those that you would otherwise import in the same vehicle classes,” he explained.

“Is there a way that policy can intervene that would make our cars competitive, and make investment in South Africa attractive for those that want to come into our domestic market?”