At a time when the global automotive space is navigating an era of transformation, the country’s industry stands at a crossroads. Toyota South Africa Motors (TSAM) CEO and President, Andrew Kirby, recently depicted a stark yet hopeful vision for the sector.
The automotive business council of South Africa, NAAMSA, has released a report that paints a mixed picture of the country’s automotive sector. However, policies play a key role in addressing challenges in the industry and four, in particular, are worth noting.
According to the NAAMSA report, total vehicle sales in 2024 reached 515,712 units, reflecting a 3% decline compared to the previous year. Passenger car sales grew by 1.1%, but light commercial vehicle sales dropped by 12%, and heavy trucks and buses saw declines.
With regards to this, Andrew Kirby, the CEO and President of Toyota South Africa Motors (TSAM) emphasized, in January, that five key market shifts would redefine the automotive landscape this year, namely:
- A consumer-driven shift in the affordability factor
- SUVs continue to dominate
- The rise of in-car technology
- The Chinese and Indian automotive surge
- The new energy vehicle (NEV) transition
“If we look at used car sales, we’ve seen a significant increase,” Kirby explained at the time. “Consumers are prioritizing affordability, with many unable to meet financing requirements for new vehicles. This trend will persist into 2025, influencing model availability and pricing strategies.”
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He added: “The in-car experience is now a decisive factor in purchase decisions… it’s not just about driving anymore; consumers want seamless connectivity between their vehicles and smartphones, creating a digital-first car ownership experience”.
In terms of theshift in the automotive power map, the following should be noted:
- Chinese-made vehicles now account for 29% of global production and sales, with a 645% increase in South Africa alone over the past five years.
- India’s automotive market share has grown by 20% globally, now making up 30% of South Africa’s vehicle imports.
- Germany, once a dominant force, has now fallen out of the top five vehicle-producing nations globally.
The Four Policy Challenges That Must Be Addressed
A review of these challenges necessitates that, to remain competitive and stimulate a strong sector, several factors must remain at the forefront as the year advances:
1. The Stalled South African Automotive Masterplan (SAAM)
SAAM, released to the public in 2018, set ambitious targets for production volumes, employment, and local content. However, six years later, critical pillars remain unimplemented — particularly optimizing the local market and regional trade integration.
2. An Unequal Playing Field for Imports
China’s state-backed incentives and aggressive pricing are reshaping global trade. South Africa, however, lacks a fair competition framework.
The country, therefore, needs balanced trade policies that allow competition without undercutting local manufacturers.
3. An Incomplete EV Policy
South Africa’s current EV incentive structure is inadequate and Kirby had urged that, “we need a broader industrial policy that considers hybrids, plug-in hybrids and battery electric vehicles, rather than a narrow focus on full EVs”.
4. The Early Signs of Deindustrialization
According to the Toyota CEO, South Africa is showing signs of deindustrialization, with imported vehicle sales outpacing locally built models.
“We need to create scale, increase local content, and attract investment — or risk losing our automotive manufacturing stronghold,” he has said.
5.The Road Ahead
Despite the challenges, Kirby stated that there are incredible opportunities here but they hinge on proactive policy reforms.
As South Africa stands at this defining moment, the decisions made in the next three years will determine whether the country remains an automotive powerhouse — or falls behind in the global race.
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