South Africa's automotive industry is a sector in motion

A tough global environment:

2025 was not an easy year for international trade. The United States (US) imposed sweeping tariffs, most notably its so-called "Liberation Day" duties and a separate set of tariffs on imported vehicles and components.

These measures rattled global markets and added new layers of uncertainty for any country reliant on trade, including South Africa. At home, the industry also had to contend with rising competition and the accelerating global shift away from traditional petrol and diesel vehicles towards what the industry calls new energy vehicles, or NEVs, a broad term covering hybrids (HEV), plug-in hybrids (PHEV), and fully electric vehicles (EVs).

The numbers tell a good story:

Despite the headwinds, the domestic industry delivered. Vehicle exports reached a record 414 271 units in 2025, up from 391 128 the year before. The total value of all automotive exports, including vehicles and components, climbed to R291 billion, a gain of R22,2 billion on 2024. South Africa now sells vehicles to 154 countries, making its export reach genuinely global.

On the home front, new vehicle sales rose sharply to 597 338 units in 2025, up from 516 103 in 2024. Vehicle production also increased, reaching 618 077 units. These are not small gains, and they point to a domestic market that, whatever its difficulties, still has real appetite.

The automotive sector contributed 5,2% to South Africa's gross domestic product in 2025, a figure that has held steady. More striking is its share of manufacturing output, which rose to 23,8%, reinforcing just how central the automotive industry is to the country's industrial base.

Investment and jobs:

Seven vehicle manufacturers operate in South Africa. Together, they invested R7,2 billion in modernising facilities and expanding model lines during 2025. The component sector, which supplies parts to these manufacturers, attracted R5,8 billion in investment, nearly double the R2,95 billion recorded in 2024. Encouragingly, four of the seven manufacturers have already begun producing hybrid or plug-in hybrid models locally.

Employment figures paint a slightly more complicated picture. The number of people directly employed by vehicle manufacturers dipped marginally to 32 115, while the broader component sector employed around 81 153 people. These numbers are broadly stable, but in an industry of this scale, even small shifts matter.

The road ahead:

The outlook for 2026 is described as cautiously optimistic, a phrase that carries as much caution as it does optimism. Global trade policy remains unpredictable, and the indirect consequences of prolonged uncertainty, weaker demand from key trading partners, disrupted supply chains, may prove more damaging than any single tariff measure. The International Monetary Fund forecasts global growth of 3,3% for 2026; the World Bank is more conservative at 2,6%.

For South Africa, the priority is clear: attract investment in NEV production, deepen local supply chains, and ensure that government policy supports rather than hinders the transition. A review of the country's long-term automotive masterplan is expected in 2026, and the industry is watching closely.

Key performance indicators under the APDP2 - 2024 to 2025:

• Source: Econometrix, naamsa/Lightstone Auto, NAACAM, OICA, SARS, StatsSA
• Image: AI Generated