Localisation can save the embattled local automotive manufacturing sector

THERE has been a lot of public commentary about the challenges facing the automotive manufacturing industry and the outcomes of the 2025 Auto Week, however scant attention is being paid on one of the key takeaways of the event, namely, how intensified localisation of the vehicle production process can help to alleviate the pressure the industry is facing.

- EUSTACE MASHIMBYE

The recent Auto Week 2025 conference that was hosted in the city of Ggeberha in the Eastern Cape was not only historically significant as the choice of venue for the event was unprecedented in the history of the sector, but it was also held at a time when the industry is at crossroads and is staving off debilitating aftershocks that pose an existential threat to the industry in the country.

Ggeberha’s status as the centre of automotive manufacturing since the 1920's provided a fitting backdrop for stakeholders to take stock of the challenges that beset this critical industry that supports more than 115 000 direct manufacturing jobs, more than 500 000 employment opportunities across its value chain and contributes approximately 5.3% to the gross domestic product.

The nearly century-old South African car manufacturing industry is gingerly walking through unfamiliar terrain in a minefield dotted by punitive tariffs imposed by the Donald Trump administration, the influx of cheaper vehicle imports from China and India, declining production volumes, an introduction of more rigorous vehicle emissions regulations in leading export destinations such as the European Union (EU), and an expensive shift to electric vehicles.

What is more telling is that though the industry is under siege, increased localisation provides the sector with a much-needed lifeline that can help insulate it against some of these external pressures.

Though there is not much that the doyens of the industry can do to influence policy changes that have an adverse impact on the industry, it has become abundantly clear that increased localisation of production can serve as the industry's saving grace.

The importance of leveraging localisation to insulate the industry from the impact of increased tariffs, influx of cheap imports, and compliance with exacting EU emissions is to leverage local procurement to bolster the resilience of the industry.