SA’s automotive parts industry under pressure

Extent of job losses:

Between 2023 and 2026, NAACAM reported that the industry shed approximately 7 500 jobs, reducing employment in the component sector to around 79 800 workers. In the same period, 15 companies closed operations, including Goodyear’s Kariega tyre plant, which alone accounted for 907 retrenchments. A parliamentary presentation by NAACAM in early 2026 confirmed that 4 400 workers were retrenched and 13 companies shut down in just two years.

The dtic’s own submissions in 2026 noted that employment in vehicle manufacturing had fallen to 31 675 workers by June 2026, reflecting the wider contraction across the sector.

Government statements:

The Department of Trade, Industry and Competition (dtic )has acknowledged these challenges. In 2025, Minister Parks Tau stated that localisation was not simply a compliance measure but a “strategic imperative”, adding that a 5% increase in local content could unlock R30 billion in procurement opportunities, far exceeding export earnings.

The dtic has also emphasised that the South African Automotive Masterplan (SAAM2035) and the Automotive Production and Development Programme (APDP Phase 2) have not met their employment and localisation targets, requiring urgent review.

Causes of decline:

Both NAACAM and the dtic attribute the losses to several structural factors:

• Falling local vehicle production, with OEMs reducing volumes.
• Cheap imports, particularly from Asia, eroding domestic market share.
• Policy uncertainty, with SAAM2035 and APDP Phase 2 failing to deliver expected outcomes.
• High input costs and infrastructure constraints, including energy and logistics challenges.

NAACAM’s recommendations:

NAACAM has issued detailed proposals to stabilise the industry and prepare for the transition to new energy vehicles (NEVs):

• Localisation requirements to ensure higher domestic content in vehicles.
• Tariff differentials to favour locally produced components.
• Demand-side incentives to encourage adoption of locally manufactured NEVs.
• Skills development programmes focused on robotics, AI, and advanced manufacturing.
• Integration with AfCFTA, positioning South Africa as a regional hub for component production.

Opportunities:

A joint study in July this year by NAACAM and the ILO (International Labour Organization) projects that 8 200 jobs could be at risk by 2035 if the NEV transition is poorly managed. However, localisation of NEV components could generate approximately 3 370 new jobs, particularly in hydrogen fuel cells and high-voltage harnesses.

Conclusion

The automotive parts industry in South Africa is facing structural decline, with thousands of jobs already lost and more at risk. Both NAACAM and the dtic emphasise that localisation, tariff reform, and skills investment are essential to stabilise employment and reposition the sector for the NEV era. Without urgent intervention, further deindustrialisation is likely, but with coordinated action, the industry could secure a competitive role in Africa’s automotive future.