Automotive sector in a time of distress: An opportunity for localised EV manufacturing

IN THE EASTERN Cape, the automotive industry sustains thousands of families and anchors the provincial economy and our country’s automative sector.

- ZIMASA VAZI

The province is home to the largest automobile industry in the country, with four major vehicle manufacturers and even more vehicle component manufacturers. It produces 46.5% of light passenger vehicle in South Africa, as well as 53% of the light vehicle exports (NAACAM, 2023). But right now, it faces its most difficult challenge to date. Global trends are reshaping the automotive industry at an unprecedented pace.

The automotive sector drives the province's economy, contributing to manufacturing employment and millions of rands to gross value added. However, the global shift towards New Energy Vehicles (NEVs), which require fewer parts and different manufacturing processes, presents both opportunities and challenges.

At the same time, geopolitical realignments and shifts in trade relations, climate and energy policy has delivered unimaginable shocks like import tariffs by the United States, the unilateral escalation of nontariff barriers like border carbon adjustments (BCAs) in Europe and developing country economies not performing to the urgency of the task of cushioning their peoples and export sectors from these shocks.

With the US 30% tariff on certain South African exports, part of a broader protectionist wave impacting many of its trading partners, our industry captains went into a frenzy and many in our called for a foreign policy of minimal direct relations to our trade and what we export.