South Africa to make public plans to boost local vehicle production
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South Africa will present measures by the end of February to boost local vehicle production, including reviews of luxury taxes on imported cars and import tariffs, the government said on Tuesday. The policy review is meant to respond to pressures such as the shift to electric and hybrid vehicles, tighter emissions rules, changing trade dynamics and competition from low-cost imports from China and India.
Officials said South Africa has this year lost its long-held position as Africa’s biggest vehicle producer to Morocco, adding urgency to the policy overhaul. Mkhululi Mlota, chief director of automotives at the Department of Trade, Industry and Competition, told lawmakers the department is running a comprehensive review while also addressing concerns raised about local production.
Mlota said proposals from industry and other stakeholders are focused on reversing the slide in localisation, and he expects a final proposal before the end of February. Deputy trade and industry minister Zuko Godlimpi said officials are considering tax reforms to favour local vehicle production, including changes to the ad valorem (luxury) tax and a reassessment of import tariffs, with engagements with National Treasury expected to begin soon.
South Africa’s 2018 automotive master plan set goals to raise local vehicle production to 1% of global output—about 1.4 million units—and lift local content in domestically assembled vehicles to 60% from below 40%. Local production rose to 602,302 units in 2025, but imported light vehicles still made up 69.3% of national sales, reflecting rising volumes of affordable imports, especially from India and China.
Godlimpi said the government is in talks with Chinese carmakers about expanding local manufacturing, as policymakers look to attract more production capacity. The comments followed Nissan’s announcement last week that it would sell its manufacturing assets in South Africa to the local arm of China’s Chery Automobile.
