President Cyril Ramaphosa’s explicit focus on protecting jobs, strengthening industrial policy, advancing tariff reform and accelerating the green economy transition affirms the central role of the automotive sector in driving GDP growth, exports, industrial capability and employment.

Protection of manufacturing and tariff integrity:

Naamsa notes government’s commitment to closing loopholes in the tariff structure and introducing additional measures to protect and grow South Africa’s manufacturing base.

In a global trade environment characterised by excess capacity, intensifying import competition and heightened protectionism, naamsa emphasises that trade policy calibration must be precise, World Trade Organisation WTO consistent and aligned with long term domestic industrial sustainability.

Tshetlhe Litheko, Chief Policy Officer of naamsa, states that the automotive industry welcomes the clear commitment to protect South Africa’s manufacturing base. “Our sector operates in an increasingly competitive global environment, and maintaining domestic production scale is essential to safeguarding jobs, exports and long-term investment. Policy coherence, certainty and stability will be decisive in ensuring South Africa remains a preferred production location within global automotive value chains.”

New energy vehicle NEV transition:

Naamsa welcomes the announcement of a 150 percent tax deduction for investment in NEVs, alongside support for local battery production, as a strong and positive supply side signal to investors and global parent companies allocating future vehicle platforms.

However, naamsa stresses that South Africa’s transition framework must remain technology neutral, export aligned and globally competitive. A credible transition pathway must explicitly recognise battery electric vehicles, plug in hybrids and hybrid technologies as part of a sequenced and realistic decarbonisation trajectory.

Tshetlhe adds that investment decisions for future vehicle platforms are being made now. “Clarity on implementation rules, timelines and incentive structures is critical. A technology-neutral framework, combined with supportive domestic market measures, will significantly enhance South Africa’s competitiveness in attracting new model allocations and sustaining export growth.”

Infrastructure and competitiveness reform:

It further welcomes the continued focus on reforming ports, rail and the energy system. The automotive industry is export intensive and logistics sensitive, and improvements in freight efficiency, port performance and energy reliability are fundamental to restoring South Africa’s structural competitiveness.

The way forward:

The organisation says it remains committed to structured engagement with government and labour to advance an integrated policy approach that:

• Protects domestic production scale.
• Enables a technology neutral NEV transition.
• Secures and expands export market access.
• Supports localisation across the automotive value chain.
• Sustains high quality industrial employment.

The 2026 State of the Nation Address reinforces the strategic importance of the automotive sector to South Africa’s economic future. The next critical step is detailed, credible and time bound policy implementation that translates intent into investment certainty.

Quick facts about the South African automotive industry

• The automotive industry contributes 5.2% to GDP, comprising 3.2% manufacturing and 2.0% retail.
• In 2024, the export of vehicles and automotive components reached a record R268.8 billion, equating to 14.7% of South Africa’s total exports.
• The industry accounts for 22.6% of the country’s manufacturing output.
• Vehicles and components are exported to 155 international markets.
• The manufacturing segment employs 115 000 people.
• Combined with multiplier effects, the industry sustains 498 000 jobs across the formal economy.