The country’s message was clear: Africa’s economic transformation depends on building its own manufacturing and trade networks, with the automotive industry as the cornerstone.

The approach combines localisation, investment, and regional cooperation through the African Continental Free Trade Area (AfCFTA).

• Setting the vision:

Dealerfloor reported earlier, South Africa’s delegation showcased an automotive ecosystem that contributes 4.9 per cent to national GDP and nearly 20 per cent to total manufacturing value add. The industry produced R170.7 billion in manufacturing value in 2024, directly employing 115 000 people. Guided by the South African Automotive Masterplan (SAAM), the goal is to lift annual vehicle production from around 500 000 to 1.4 million units by 2035.

Donald MacKay, Chief Executive of XA Global Trade Advisors, told delegates at the recent South African Auto Week that “talking Africa whilst trading elsewhere” has long limited regional potential. Although four countries, South Africa, Egypt, Nigeria and Algeria, account for half of Africa’s GDP, only 5 per cent of South African passenger vehicle exports go to the continent, and just 2 per cent to SACU (Southern African Customs Union - Botswana, Eswatini, Lesotho, Namibia, and South Africa). Donald argued that the AfCFTA presents a once-in-a-generation opportunity to fix this imbalance by reducing tariff barriers, harmonising regulations, and aligning supply chain standards.

• Trade shifts and structural risk:

He also warned of growing global protectionism. “Trade wars force dumping to occur, and some of it will happen here,” he said, noting that trade defence investigations rose 97 per cent between 2023 and 2024. With tariffs in the United States up sevenfold in nine months, he cautioned that South African exporters must diversify. “Eighty-three per cent of global trade now does not involve the USA,” he said, emphasising that African integration is becoming an industrial necessity.

Despite progress, production remains below target. The sector produced 577 624 vehicles in 2024, compared with the SAAM projection of 862 840 units. Export dependence is still high: 401 136 vehicles were exported while only 176 488 were sold locally. Exports account for 72.5 per cent of manufacturing value addition, underlining the urgency of strengthening Africa’s internal markets.

• Localisation for inclusive growth:

The Automotive Industry Transformation Fund (AITF) also used the IATF platform to promote localisation. The fund plans to expand support for component producers and small manufacturers. Chief Executive Mkhululi Dlamini said that “Africa’s automotive growth must be inclusive and sustainable, giving rise to Black owned enterprises that can participate fully in the value chain.”

Localisation levels currently stand at about 39.1 per cent, with a goal of 60 per cent by 2035. The Automotive Production and Development Programme (APDP) provided R16.5 billion in rebate benefits in 2024, maintaining a manufacturing value addition ratio of 10.33 to one, meaning every rand of government support generates more than ten rand in manufacturing value.

• Infrastructure and trade efficiency:

Logistics remain a major obstacle. Donald highlighted that while Africa hosts some of the world’s best ports, it also has the worst performing. The World Bank’s 2024 Port Performance Index ranks Durban among the lowest globally. “You cannot industrialise if your ports cannot deliver,” he said. Trade costs in Africa are 40 per cent higher than the global average.

To respond, the Department of Trade, Industry and Competition (the dtic) has launched a logistics improvement plan to modernise customs and reduce delays. New special economic zones and inland logistics hubs are being developed to support vehicle exports and regional trade flows.

• Policy, Investment and the AfCFTA:

The IATF highlighted South Africa’s policy focus on industrialisation and the benefits of the AfCFTA. The dtic’s Automotive Investment Scheme continues to attract global investors from Asia and Europe. However, Donald MacKay warned that “policy ambition must be matched with administrative capability.” He pointed out that although 41 per cent of South Africa’s exports to the United States are duty-free, intra-African tariffs remain cumbersome. The AfCFTA aims to address this through a unified customs system that could lift intra-African trade in vehicles and parts from 5 per cent to 25 per cent by 2035.

• Financial and technological transitions:

Technology and finance are now driving the next phase of transformation. Although production fell slightly to around 600 000 vehicles in 2024, electric vehicle (EV) pilot projects expanded rapidly. The National Association of Automobile Manufacturers of South Africa (naamsa) views this as a critical step towards long-term competitiveness.

Charl Potgieter, Managing Executive for Absa Vehicle and Asset Finance, stressed the role of financial institutions in enabling this shift. He recently wrote in an article in FA News (7 October 2025) that “financial institutions cannot be passive enablers. Banks must be strategic partners, supporting first-time buyers, financing industrial capacity, and accelerating the transition to green technologies.” He added that “cross-sector collaboration is becoming central to long-term competitiveness.” Absa reached its R100 billion sustainable finance target a year early, actively supporting the industry’s green transition.

Additional reporting: Justin Barnes Industry-Government Symbiosis presentation (2025), IOL (2025), Brand South Africa (2025).