Andrew Kirby, CEO of Toyota South Africa Motors (TSAM), has warned that government intervention is needed to protect the domestic auto industry from cheaper imports, more specifically those hailing from China and India.
Speaking at TSAM’s annual State of the Motoring Industry address, Kirby said that that influx of these vehicles has created an “unequal playing field” in the local automotive landscape.
Over the past few years, South Africa has seen the arrival of numerous Asian brands that undercut legacy automakers in pricing and deliver equal levels of luxuries and performance.
These include nameplates such as BYD, Chery, Foton, GAC, Jaecoo, Jetour, LDV, Maxus, MG, and Omoda – all of which arrived in our borders some time between August 2021 and January 2025.
Consequently, looking at the sales stats, locally produced vehicle registrations have dropped from 46% in 2018 to 43% in 2023, said Kirby.
Meanwhile, Indian and Chinese-sourced vehicle sales have increased from 18% to 37% over the same period, whereas traditional source countries like Germany, Japan, and Korea have significantly reduced.
Sales of Chinese vehicles grew an astounding 645% between 2018 and 2023, to the point where brands like Chery and Haval are consistently sitting among the top 10 automakers in the country.
“There has been a structural change in the makeup of vehicles being sold in South Africa,” said Kirby, as quoted by Engineering News.
“Successful industrialisation in South Africa requires both CKD [completed knock-down] volume growth and localisation. The market is, however, seeing a shift from locally produced vehicles and parts to imported products.”
Apart from sales, Kirby said that South Africa’s automotive localisation has dropped from 42% in 2021 to 38% in 2023, with tier 2 and lower suppliers being the most impacted. Localisation refers to the portion of locally sourced components that are found within locally made vehicles.
Urgent action required
Kirby said it is of vital importance to the domestic auto industry that government takes into account the influx of Chinese and Indian vehicles when reviewing the South Africa Automotive Masterplan later this year instead of just focusing on new-energy vehicles, given the fact that the overwhelming majority of these cars are petrol or diesel-powered.
One of the reasons these cars are so aggressively positioned in the market is because the Chinese government plays a big role in supporting the production of vehicles and parts, something that is largely absent in South Africa.
“In South Africa, you can trade the [export] rebates but also have the option of investing in a semi-knocked down operation, which means a small investment and no investment in painting and welding, small assembly, small employment, and you can effectively reduce the import duty down to 5% [from 25%],” said Kirby, according to Moneyweb.
“That is not an equal playing field. People have been investing in CKD [plants] at huge expense to try and make sure they are globally competitive and part of the global sourcing arrangements. Now we have this imbalance situation.”
Kirby said that hiking import duties on Chinese vehicles, similar to what can be seen in Europe and the USA, may not be the answer, however, urgent government intervention is still required to “create a balanced environment where we all thrive and there is more competition.”
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