You might have expected a resounding cheer from local motor industry executives on Thursday when, during a two-day conference in Gqeberha, it was announced that September’s new-vehicle sales hit their highest monthly level in a decade.
The 54,700 total was the best since September 2015. After nine months of 2025, the aggregate market was 15.6% more than at the same stage last year.
Celebrations, however, were muted. With the exception of Toyota, whose magic marketing recipe continues to ward off the onslaught of imported brands, local manufacturers were on the defensive as they once again found themselves outsold by Suzuki, Hyundai, Great Wall Motors, Chery, Kia and Mahindra.
It was a particularly chastening month for Mercedes-Benz, a traditional giant of the local market but now also outsold by Chinese names such as Omoda, Jaecoo, Jetour and MG.
Of the 10 top-selling brands in September, only four manufacture in SA.
So it is no surprise that the most consistent theme of the conference, run by industry association Naamsa, was how to regulate the flood of imported cars and bakkies, particularly Chinese, entering the SA market.
Leading the onslaught to limit numbers are some of the key architects of the government’s 2021-35 Automotive Production and Development Programme (APDP).
Rob Davies, who was trade & industry minister when the programme was devised, says he is “shocked” that imports make up 64% of new cars and bakkies sold in SA.
Prof Justin Barnes, a long-time policy adviser, says the situation was unforeseen.
So was the idea that foreign companies could enjoy APDP benefits by importing vehicle kits requiring only minimal assembly, very few jobs and, in some cases, no local components.
The process is known as semi-knocked-down manufacture, or SKD. Irvin Jim, general secretary of the National Union of Metalworkers of SA (Numsa), calls it “screwdriver” assembly.
The APDP was designed to support full-scale vehicle manufacture, including the local sourcing of components.
Barnes says: “Why SA would tolerate SKD operations is beyond me.”
Toyota SA Motors president Andrew Kirby estimates that for every SKD assembly-line job, full local manufacture would provide another seven.
Since signs of import and SKD imbalance began to show, Barnes says the government has ignored repeated requests to adjust the APDP to level the playing field.
He says the original logic of the APDP was simple. Every vehicle made by a local company, known as an original equipment manufacturer (OEM), would entitle it to import one at reduced or zero duty. It hasn’t worked out that way.
“I’m deeply concerned,” he says. “These distortions of the programme should never have been allowed. We have shouted from the rooftops and were told the programme will be fixed. But it never is. All we get from government is promises. Now we have major issues.”
The implications are profound. The primary aims of the APDP were to double SA vehicle production, double industry employment and increase local content in locally made vehicles by 50%. In all three cases, pre-APDP levels have actually reduced.
That’s why last month’s sales figures were met with less than industry jubilation. The market was up, but demand for local vehicles was down. As Kirby says, APDP goals all hinge on the local industry building more vehicles.
The more vehicles, the more jobs and the more scope for component localisation.
Barnes says that according to original APDP scenario planning, local OEMs were expected to build over 345,000 vehicles for the domestic market in 2024. As it turned out, the number was 176,488. In total, the industry built just under 600,000 vehicles. Kirby says it should have been over 700,000.
The saving grace — for now — is exports. About two-thirds of SA-made vehicles make their way to foreign markets.
Kirby reckons about 72% of industry jobs are supported by export business. However, most exports go to the UK and EU, where the emphasis on electric vehicles (EVs) will cause them to outlaw the sale of petrol and diesel vehicles after 2035. SA is primarily a producer of the older technology.
The UK and EU deadlines have been known for many years, but, as with much else, the government has been slow to get its head around them. It has started to offer some EV incentives, and, at last week’s conference, trade, industry & competition minister Parks Tau pledged more urgency.
He said: “If we do not adapt, we risk losing these key export markets.” He stressed that SA’s interests go beyond simply building EVs.
“Our country and region host some of the world’s largest deposits of platinum, manganese, nickel, cobalt and rare-earth minerals.
“This is a once-in-a-generation opportunity to move beyond exporting raw materials and instead beneficiate locally, producing battery-grade inputs and building a competitive battery manufacturing value chain here in Africa.”
Naamsa president and Isuzu Motors SA MD Billy Tom says it’s time for the government to stop talking about its EV plans and to give the industry absolute clarity. “We want a clear directive.”
Jim says the only directive the government needs to give is that it will stop pussyfooting around with trade issues and put SA first.
Jim, who was also part of the APDP design team, argues that motor companies that do not manufacture vehicles in SA should not be allowed to sell here. At the very least, he wants higher import duties on built-up vehicles and a change in APDP rules to allow OEMs to use manufacturing incentive credits to reduce business costs and retail prices.
As things stand, these credits may be used to reduce duties, often to zero, on vehicles imported by OEMs to supplement their limited local ranges. In some cases, however, the value of these credits far outweighs import needs, sometimes by billions of rand, and excess credits are sold through traders to independent importers to reduce their own duty commitments.
Jim says: “APDP levers meant to strengthen local production have been hijacked and sold off to traders.”
By keeping credits in-house, local OEMs could be more price-competitive against imports.
Jim, who also favours a total ban on tyre imports to protect what little is left of SA’s tyre manufacturing industry, says: “Over the past two-and-a-half years, this industry has been bleeding jobs. We are facing plant closures, short time and layoffs, and the components value chain is under siege.
“Government has not done enough to stem deindustrialisation.
“We must be decisive in defending our industry by imposing tariffs where necessary. The developed world has consistently protected itself. SA must act in the interests of its own people.”
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