Tshwane Automotive Special Economic Zone Archives - Page 5 of 12

Gauteng gears up for green revolution as New Energy Vehicle Summit kicks off

By Mandla Mpangase The inaugural New Energy Vehicle Summit is taking place this week in Gauteng, drawing attention to the importance and urgency of moving to green mobility within South Africa’s automotive industry. The landmark event, hosted by the Gauteng Growth and Development Agency (GGDA), the Automotive Industry Development Centre (AIDC), and the Tshwane Automotive Special Economic Zone (TASEZ), will assess the progress of the transition to new energy vehicles (NEVs), investigate possible partnerships, and plan practical strategies to accelerate the creation of a competitive local NEV ecosystem. Speaking ahead of the summit on Channel Africa’s Africa Update with Lulu Gaboo, the CEO of TASEZ, Dr Bheka Zulu, said the gathering marks more than just summit. “It’s a statement that Gauteng, as the heart of South Africa’s automotive sector, is ready to lead Africa’s technological shift,” said Dr Zulu. “With more than 60% of the country’s vehicles produced in this province, we are asserting South Africa’s leadership in the continent’s new energy vehicle transition.” Zulu said South Africa is no longer a “passenger” in the global race toward electric mobility. Since the release of the EV White Paper in 2023, the focus has been on positioning the country for global competitiveness through research, innovation, and partnerships. “We’re gearing up for the race on the global EV track,” he noted. “Our goal is to attract international investors, harmonise trade standards across African markets, and promote regional value chains that make South Africa the hub for sub-assemblies and NEV components.” Dr Zulu emphasised that the NEV Summit, taking place at the Gallagher Convention Centre on 22-23 October, will focus on building consensus between industry, labour, and government to develop a balanced roadmap for transformation, one that prioritises both ambition and pragmatism. Policy alignment Asked about policy readiness, Dr Zulu said South Africa already has the right frameworks in place, but faster implementation and targeted incentives are needed. “The road is paved; now we need the green light to move faster,” he said. “We must streamline tax incentives and develop charging infrastructure that supports local manufacturing and adoption.” The NEV shift represents a major opportunity for deepening local supply chains, creating high-value jobs, and transforming South Africa into the main exporter of NEV components across the continent. The South African Automotive Masterplan 2035 (SAAM 2035) is a key enabler of the transition, with its goals to increase local content from 40% to 60% and to double employment in the sector. It is supported by the Electric Vehicles White Paper, that was published at the end of 2023. “This is not just about swapping the engine for a battery,” he said. “It’s about creating new high-value jobs and ensuring that no one is left behind, including workers, black industrialists, and small suppliers.” At the heart of the TASEZ strategy is inclusivity, with initiatives to upskill the existing workforce, mentor small component manufacturers, and facilitate partnerships between local suppliers and global OEMs. Collaboration is vital Dr Zulu stressed that while Original Equipment Manufacturers (OEMs) like Ford play a critical role, the NEV opportunity is open to new entrants and innovators. “The NEV space is for everyone,” he said. “We want to see new black industrialists and emerging OEMs entering the field. This is the transformation we’ve been driving.” Although reliable energy and charging infrastructure remain a challenge, partnerships are being developed to roll out a national charging network and invest in renewable solutions. “We are identifying key sites and collaborating with private partners to ensure charging infrastructure keeps pace with NEV adoption,” he said. With the European Union’s zero-emission and carbon border adjustment policies set to take effect by 2035, dr Zulu said South Africa must align its timelines and environmental standards with international expectations. “We’re adapting our manufacturing processes to reduce coal-based energy use and increase solar, gas, and hydrogen integration,” he said. “Our ambition is to match the EU’s climate neutrality goals and maintain export competitiveness.” Looking ahead to 2035, Dr Zulu concluded: “We want NEVs to form a significant part of local production, deepen component manufacturing, and make South Africa the hub of NEV exports to Africa and beyond,” he said. “Most importantly, we want this transition to create jobs, skills, and shared prosperity.”

South Africa must shift towards green mobility

News / By Tasez

By Mandla Mpangase South Africa’s transition to a green and sustainable automotive industry is not a “nice-to-have” it’s a fundamental social and economic requirement. As the world accelerates toward green mobility, the country’s automotive leaders are racing to ensure that local manufacturing keeps pace with global change while also capturing greater value from Africa’s mineral wealth. This was the message from Andile Africa, CEO of the Automotive Industry Development Centre (AIDC), during an interview on SAfm Radio on Friday, 17 October 2025, with Cathy Mohlahlana on The Talking Point. Africa was speaking ahead of the inaugural New Energy Vehicle (NEV) Summit, set to take place on 22–23 October at Gallagher Convention Centre – an event that signals South Africa’s intent to move from policy to action in the NEV space. “Globally, the move from internal combustion engines towards NEVs, particularly battery electric vehicles, is no longer a debate – it’s a reality,” said Africa. “South Africa must move with the rest of the world or risk losing a significant part of our automotive export markets.” Gauteng at the centre of the shift Gauteng, the country’s economic engine, is at the forefront of this transformation. The province accounts for 37% of all vehicles sold in South Africa and is home to three major original equipment manufacturers (OEMs): BMW, Ford, and Nissan. The Gauteng province, led by the Gauteng Growth and Development Agency, and supported by the AIDC and the Tshwane Automotive Special Economic Zone, is playing a key role in preparing South Africa for the shift to green mobility. But, Africa notes, the transition will not be easy. South Africa’s NEV uptake remains modest at less than 2% of new vehicle sales – largely due to high vehicle prices and limited charging infrastructure. “Electric vehicles are still 40% to 50% more expensive than internal combustion cars,” Africa explained. Something to mull over is how other countries have managed to drive their NEV markets and combat high costs. “Other countries have introduced incentives or subsidies to bridge this gap. We’re not there yet in South Africa, and that’s one of the discussions we’ll be having at the summit.” Export pressures South Africa’s automotive industry, which exports most of its locally produced vehicles – BMW, for example, exports 97% of its vehicles to the UK and Europe, is already under pressure from international regulations. “Europe has made it clear that by 2030, they will no longer register new vehicles that are not zero-emission,” Africa noted. “If we don’t adapt our manufacturing base, we stand to lose access to those markets and the thousands of jobs they sustain.” This makes the South African Automotive Master Plan 2035 (SAAM 2035) and the EV White Paper more urgent than ever. Both frameworks envision a globally competitive, green automotive industry that supports innovation, industrialisation, and export growth. However, the transition cannot succeed without addressing energy security and infrastructure. As South Africans often point out, load-shedding remains a major obstacle. “It’s a fair concern but this is precisely why we need to use this transition to rethink how we generate and distribute energy. The entire value chain must move toward cleaner, more sustainable sources like solar and wind.” Beneficiating Africa’s minerals In a second interview on the same day, Africa told Ashraf Garda on SAfm’s afternoon show The National Pulse that another opportunity – and challenge – for South Africa’s automotive sector— lies beneath Africa’s soil. The continent holds vast reserves of critical minerals such as lithium, cobalt, manganese, and nickel, which are all essential for electric vehicle batteries. Yet much of this wealth leaves African shores unprocessed. “If Africa wants to truly benefit from the green transition, we must not only supply raw materials, we must manufacture and beneficiate them locally,” said Africa. South Africa and the continent can build value chains that produce battery components, not just export ore, and in so doing, secure jobs, industrial growth, and economic independence. The upcoming NEV Summit will bring together government, industry, academia, and investors to explore precisely this: how to build a sustainable ecosystem for NEVs, from mineral beneficiation and battery production to vehicle assembly and charging infrastructure. Although South Africa’s journey toward NEVs is still at an early stage, the momentum is growing. The policy groundwork is in place, global market pressures are mounting, and industrial leaders like Africa are pushing for coordinated action. South Africa has a strong foundation: the raw materials, the manufacturing base, and the industrial know-how. As the NEV Summit convenes in Gauteng next week, one thing is clear: South Africa’s green mobility revolution will not only depend on how it adapts to new technologies, but on how boldly it turns its mineral wealth into sustainable industrial value.

Gauteng charges ahead with Africa’s green mobility future

News / By Tasez

Gauteng is looking to secure its place on Africa’s map in terms of the production of New Energy Vehicles (NEVs), setting an agenda that will see a green transport revolution across the continent. Under the leadership of Gauteng Department of Economic Development, via the Gauteng Growth and Development Agency (GGDA), the province is translating big ideas into reality; from policy to production and from vision to economic reality. In September 2025, Gauteng MEC for Economic Development and Finance Lebogang Maile laid the foundation in an address at a dialogue with the automotive industry. There, he outlined the province’s ambition to turn Gauteng into the hub of Africa’s automotive industry – and NEVs have to play an important role in this. Gauteng already accounts for a third of the country’s automotive manufacturing output. In 2024, the automotive industry contributed 5.2% towards South Africa’s GDP, with 110 000 direct jobs – 33 154 in the original equipment manufacturers and 81 860 people employed by component manufacturers. It is also home to three original equipment manufacturers (OEMs), BMW, Ford and Nissan – all based in the City of Tshwane – as well as automotive development hubs such as the Automotive Industry Development Centre (AIDC) and the Tshwane Automotive Special Economic Zone (TASEZ). Together, Gauteng’s OEMs produced 1.8 million vehicles between 2014 and 2023, accounting for 32.8% of South Africa’s vehicle production, and, according to the naamsa (the Automotive Business Council), Gauteng’s automotive sector is expected to gain momentum, especially with the establishment of the Tshwane Automotive City. Making sure the vision becomes concrete, the GGDA, along with the AIDC and TASEZ, is hosting the 2025 NEV Summit to drive Gauteng towards a green automotive economy, providing insights into trends and innovations across the NEV sector. A strong manufacturing sector For decades, South Africa has powered Africa’s automotive industry. Yet the global automotive landscape is shifting rapidly. The European Union’s carbon neutrality commitments are reshaping trade and market access, making low- or zero-emission vehicles essential for competitiveness. NEVs are no longer optional, they are essential to South Africa’s continued participation in global markets and will play a significant role in meeting the target set in the South African Automotive Master Plan (SAAM 2025) to manufacture 1% of the global automotive output. Against this backdrop, the NEV Summit will unite manufacturers, investors, policymakers and innovators to accelerate South Africa’s NEV transition. It is where strategies from the SAAM 2035 and Electric Vehicle White Paper move from the drawing board to the production line. As South Africa’s industrial heartland, Gauteng – which produces a vehicle every three minutes – offers a complete ecosystem with world-class logistics, skilled labour, top universities, and a strong innovation network that is capable of driving the green mobility revolution forward. Through its focus on localisation, battery manufacturing, and value chain integration, Gauteng offers Original Equipment Manufacturers (OEMs) and investors a ready-made base for the NEV industry. Gauteng’s proactive approach positions South Africa as both compliant with international climate goals and competitive within the global market. Sustainability is no longer a nice-to-have; it is now a core driver of industrial success. Building skills for the future The shift to NEVs also demands new skills – from battery technology to software development and recycling innovation. Gauteng’s education and training institutions, supported by the GGDA, AIDC and TASEZ, are already preparing the workforce for this next-generation economy. The province is not only building factories, it is building people, ensuring that the transition is inclusive and sustainable. Gauteng’s ambition extends beyond South Africa’s borders. With Africa’s rich reserves of lithium, cobalt, and manganese – critical for battery production – the province aims to localise value-add and establish itself as the gateway for Africa’s NEV value chain. This also fits neatly in the target set in the SAAM 2025 to raise localisation to 60% by the middle of the next decade. By creating a connected network of automotive and energy hubs across the continent, Gauteng is laying the groundwork for Africa to lead the continent’s green transition. The NEV Summit 2025 will showcase how Gauteng is driving this transition, demonstrating that green growth and industrial expansion are not opposites, they are on the same route.

Reimagining the future of SA’s auto industry

News / By Tasez

By Mandla Mpangase Collaboration, skills development, and a bold push into Africa were the recurring themes during the “Value of reimagining the future, together” panel discussion hosted by naamsa during the South Africa Auto Week 2025 in Gqeberha on Wednesday. Moderated by TransUnion Africa, Lee Naik,Chief Operations Officer at naamsa (The Automotive Business Council), the high-level dialogue on 1 October 2025 brought together leading voices from finance, manufacturing, technology, and industrial development to explore how South Africa can secure its place as the continent’s automotive hub. A shared vision for 2035 CEO of TransUnion Africa, Lee Naik, set the tone by urging stakeholders to think long-term. “South Africa’s biggest challenge is not that we don’t have answers, but that we haven’t created enough spaces for honest, collective dialogue. If we can start aligning around 2035 as a target, we can fill the gaps left by global markets like the US. It begins with conversations like this,” he said. The South African Automotive Master Plan sets out key targets for the country’s automotive sector to reach by 2035, including increasing vehicle production to 1.4 million vehicles a year and raising localisation levels in South African-manufactured vehicles from an average of 40% to 60%. Managing executive of Absa vehicle and asset finance, Charl Potgieter, highlighted the industry’s dual role as a GDP driver and social enabler. “The automotive industry contributes 5.2% to South Africa’s GDP, and it creates hundreds of thousands of jobs. But beyond that, it carries our people to work, to school, to worship, to family. How can we not invest in ensuring more South Africans gain access to mobility?” WesBank’s CEO Robert Gwerengwe, echoed the sentiment. “Mobility is not just about vehicles; it’s about giving people access to the economy. A job, an education, the ability to operate in society – that’s what we finance. If we only focus on market share, we’ve missed the point.” Infrastructure and logistics as catalysts For the CEO of Tshwane Automotive Special Economic Zone (TASEZ), Dr Bheka Zulu, the future hinges on building resilient logistics networks. “If you look at the topic of the panel discussion, we are imagining the future as a collective, and it’s a collective that is sitting with a bit of uncertainty in terms of how the market flows,” Dr Zulu noted. Focusing on the term ‘together’, the TASEZ CEO observed that all in the industry need to find solutions for the country. “The reality is that we are sailing through some stormy the waters … and the shift in the industry fostered by digitisation and the issue of sustainability is what is rocking some of the boats,” he added. “Cargo is king. South Africa has over a century of automotive manufacturing expertise, but unless we create sustainable, cost-effective logistics value chains, we will lose our competitive edge,” Dr Zulu said. “Special Economic Zones must serve as gateways to Africa, linking industrial complexes with continental markets through efficient trade corridors.” Dr Zulu emphasised the need to look to the African Market. “We should be focusing on the market that we have, which is African market. We’ve got a capture market. We’ve got a market that we understand. How are we allowing the east to come and penetrate a market that we better understand.” CEO of Accenture Africa, Kgomotso Lebele, stressed the importance of transformation and localisation. “The industry must not be seen in isolation. It sits at the heart of reforms in renewable energy, mining, technology, and skills. If we get localisation right, we scale employment and create opportunities for entrepreneurs to enter global value chains.” The Automotive Industry Development Centre’s CEO Andile Africa, pointed to the practical progress made through incubation programmes pairing small enterprises with global OEMs. “We have entrepreneurs who started as tier-three suppliers and now serve major manufacturers. Transformation is possible, but it requires patience, scale, and deliberate partnerships.” Data, skills and financial inclusion Naik reminded the audience of the stark exclusion still facing millions. “There are 16 million South Africans with hopes and dreams of mobility, but the financial system says no. Technology and data can change that. Using AI and alternative data sources, we can give millions a chance to access finance, mobility, and opportunity.” The skills gap was another recurring theme. Panelists agreed that without investment in AI, robotics, and digital capabilities, South Africa risks losing its automotive competitiveness. “The future is youthful. Our continent’s young people hold the key – if we equip them with the right skills today,” said Lebele. The discussion concluded with a shared recognition that South Africa’s automotive industry cannot afford fragmented efforts. Policy certainty, infrastructure investment, financial inclusion, and regional integration were all identified as non-negotiables. “Let’s stop duplicating efforts,” urged Gobiyeza. “The industry must stand as SA Inc., put its best foot forward, and show OEMs that South Africa is not only open for business but is the natural gateway to Africa’s automotive future.”

Auto manufacturing leaders urge action on investment

News / By Tasez

By Mandla Mpangase South Africa’s automotive sector, a key industry for the country’s economy, faces losing ground globally unless decisive action is taken to attract and retain new investment. This was the central message of a high-level panel discussion at South African Auto Week 2025 in Gqeberha from 1 October 2025. This year’s South Africa Auto Week, hosted by the Automotive Business Council (naamsa), is being held under the theme “Reimagining the future together – Cultivating inclusive growth and shared prosperity”. The panel, moderated by Financial Mail and Business Day editor-at-large David Furlonger tackled the topic “Salient ingredients to attract new investment for auto manufacturing in South Africa”. Furlonger opened the discussion with a stark reminder: while global markets are making inroads with new energy vehicles, South Africa lags behind. “We are very good at coming up with plans, but not so great at implementing them,” he warned. “Now we need action.” Policy and incentives The director of advanced manufacturing at Invest SA, an agency of the Department of Trade, Industry and Competition, Rashmee Ragaven, outlined a suite of government programmes, including the Automotive Production and Development Programme and the Automotive Investment Scheme, that have been designed to support manufacturers Ragaven stressed the importance of partnerships between government and industry, and the role of free trade agreements, skills development, and special economic zones such as the Tshwane Automotive Special Economic Zone based in Gauteng, and the Eastern Cape’s industrial development zone of Coega in anchoring investment. But Ragaven acknowledged speed is critical to bringing about any change. “The partnerships are there, but the speed of action is even more critical now than ever before.” The Eastern Cape scenario CEO of the Eastern Cape Development Corporation, Ayanda Wakaba, highlighted the vulnerability of the province’s automotive industry, long a hub for OEMs such as Mercedes-Benz and VW. “The market dynamics have shifted so much that establishing an industrial plant today is very different from before. “We must benchmark ourselves against what other countries are doing,” he said. While defending the sector remains essential, Wakaba stressed the need to diversify into new industries and leverage digital infrastructure investments in rural areas to broaden economic opportunities. A call for action For Andreas Brand, CEO of Mercedes-Benz SA, the formula is simple: action. He pointed to Mercedes-Benz’s investments in solar energy and skills development through its learning academy as proof that collaboration with the government can deliver results. “Without acting, theory never hits reality,” he said. “We need robust, constructive engagement and specific actions that all parties adhere to. That is what delivers change.” Mickey Mama, head of department at the Eastern Cape’s Department of Economic Development, Environmental Affairs and Tourism, drew comparisons with Morocco and Eastern Europe, both of which have surged ahead of South Africa in attracting investment. “Our municipalities take too long to approve applications. Morocco has a turnaround time that outpaces us completely,” Mama said, warning that red tape and a lack of policy clarity on NEVs risked pushing investment elsewhere. Chinese brands on the lookout for opportunities South Africa is also facing a wave of interest from Chinese automotive brands, but obstacles remain. Conrad Groenewald, COO of Great Wall Motors, noted that while Chinese firms are eager to invest outside of China, South Africa’s current policies make it hard to justify the return on investment. “We compete globally. South Africa is already at a disadvantage, being at the tip of Africa. We need policies that allow reasonable returns for investors,” he said. Groenewald also cautioned that rising import duties and the potential removal of import credit benefits would hurt consumers and deter new entrants. “Vehicle pricing has already outpaced earnings. If policies change further, it will make it even harder to do business here,” he warned. Need to strengthen component supplier base Bronwyn Kilpatrick, CFO of Toyota, stressed the urgent need to strengthen South Africa’s tier two and tier three supplier base. “In South Africa, our manufacturing pyramid is inverted. Only 20% of value-add comes from local tier two and three suppliers. In Thailand, it’s the opposite, and it’s driven by targeted incentives,” she explained. Developing smaller suppliers, however, requires long-term commitment, mentorship, and patient capital, she added. The time to act is now Across the panel, one complex theme emerged: the need for clear policy, faster implementation, and real partnerships to support both OEMs and suppliers. As Ragaven concluded: “There is a shift in mindset in government, but speed is critical. We cannot afford to wait any longer.” South Africa’s automotive sector, which contributes nearly 5% to GDP and supports hundreds of thousands of jobs, now faces a defining moment. Competing nations like Morocco, Thailand, and Eastern Europe have shown what decisive policy and execution can achieve. South Africa must act – and it must act now – to translate its world-class skills and its hard-earned manufacturing expertise into a future-ready industry.

One-Stop Shop for investors launched in Tshwane

News / By Tasez

A new InvestSA One-Stop Shop has opened in the City of Tshwane to assist investors to speed up their new businesses or projects and cut bureaucratic red tape. The centre, based at the Tshwane Economic Development Agency (TEDA) offices in Centurion, is part of the government’s drive to become investor-friendly by improving the business environment by lowering the cost of doing business and making the process easier. The official opening, on 23 September 2025, highlighted the last drive by the City of Tshwane in attracting investors to support its infrastructure development and local economic growth, and is in keeping with its #TshwaneRising campaign. The one-stop shop, which aims to improve the ease of doing business, attract and retain investment, thereby creating jobs and supporting the City’s economic revitalisation, is the result of a strategic partnership between the Department of Trade, Industry and Competition, the Gauteng Growth and Development Agency, and TEDA. It is also an important development for the Tshwane Automotive Special Economic Zone, providing another platform to showcase the TASEZ business case for investors. The City of Tshwane’s executive mayor, Dr Nasiphi Moya, noted that the launch of the centre came just weeks after the City’s investment summit. The one-stop shop is an important facility in helping the investors who made pledges to the tune of more than R16-billion at the summit. Dr Moya reiterated the City’s ambitious plans encapsulated in the Tshwane Economic Revitalisation Strategy, which has plotted the roadmap of empowering the City through creating more than 80 000 jobs, attracting up to R26-billion in new investment, and achieving a growth rate of 4% within the next five years. The latest Statistics South Africa data confirms that the City of Tshwane is making significant progress. It has shown a 4.5% decrease in unemployment, driven by the city creating more jobs than any other metro. “This shows that Tshwane is rising,” the MMC for Economic Development and Spatial Planning, Sarah Mabotsa, said. The City of Tshwane has identified 11 key economic sectors, with the automotive manufacturing sector sitting at the top of that list. TASEZ, which is based in the east of the City of Tshwane, is a prime example of what investment can do in boosting the local and provincial economy, providing jobs for township businesses and individuals, transforming both the sector and the economy, and promoting skills development and innovation. With the launch of Phase 2 and the development of logistics infrastructure, TASEZ now provides new avenues for investors to explore, further enhancing Tshwane’s role as a hub of innovation, manufacturing, and trade. These initiatives are not only creating jobs today but also laying the foundation for long-term prosperity. “We need to agree on the vision that we have for the future of this city and its people,” said Moya.

Gauteng assesses its readiness for a transformed automotive sector

News / By Tasez

Gauteng has ambitious plans to turn the province into the automotive hub of Africa. So serious is the intention that the leading role players in the South African automotive sector gathered in Johannesburg to share insights into what is needed to make that happen. This comes amidst a rapidly evolving global automotive sector, the looming carbon-neutral targets for vehicle imports into the European Union by 2035, and the current turmoil surrounding increased tariffs being imposed on goods entering the United States. Addressing the participants at the Automotive Sector Policy Dialogue, Gauteng’s MEC for finance and economic development, Lebogang Maile, emphasised the significance of the sector to the country’s economy. In 2024, the automotive industry contributed 5.2% towards the GDP of the country, with 110 000 direct jobs – 33 154 in the original equipment manufacturers and 81 860 people employed by component manufacturers. Gauteng is home to three original equipment manufacturers, Nissan, Ford, and BMW – all based in the City of Tshwane, along with the Tshwane Automotive Special Economic Zone and the Automotive Industry Development Centre. Together, the three OEMs produced 1.8 million vehicles between 2014 and 2023, accounting for 32.8% of South Africa’s vehicle production. “According to the National Association of Automobile Manufacturers of South Africa (Naamsa), Gauteng’s automotive sector is expected to gain momentum, especially with the establishment of the Tshwane Automotive City (TAC), which will serve as an integrated logistics framework focusing on inland ports and manufacturing hubs linked to rail corridors linking Tshwane with strategic ports in South Africa and SADC (the Southern African Development Community),” MEC Maile noted. A different-looking automotive sector Speaking on the shift from internal combustion engines towards new energy vehicles (NEVs), Maile spoke of the urgency required by the automotive sector to adjust its production value chains and technologies to transition towards NEVs to retain and grow its existing market share. He also identified the challenges the automotive sector faces, including: What this all means, Maile told the participants, is that a different approach was needed to support and develop the sector. “There is a need for an inclusive approach towards transforming the sector.” While the province had made progress in terms of establishing the AIDC supplier park and the development of TASEZ, much more needed to be done to make the sector competitive, MEC Maile said. The dialogue was held to assess the province’s readiness for the NEV transition; to identify the infrastructure investment requirements for the transition; gather information into the support requirements for Tier 1, Tier 2, and Tier 3 component manufacturers; highlight skills requirements, funding collaborations and partnerships to support the transition; and understand the implication of US tariffs and potential new markets for South African OEMs. In line with the discussion on NEVs, the province will host the inaugural NEV Summit in October, where industry players will share further knowledge on the sector. For further information on the NEV Summit visit the AIDC website. visit www.aidc.co.za.

SMMEs are levers of innovation-led industrialisation that can diversify and decarbonise SA’s economy

News / By Tasez

By Mandla Mpangase The 2025 Naacam Show is taking place at a time when the automotive sector is undergoing transformation that is driven by technology and decarbonisation. “We meet as the global economy faces strong headwinds brought about by new shifts towards unilateralism and protectionism,” the Minister of Small Business Development, Stella Ndabeni, said in her address on the second day of the show, 14 August 2025. “We know the US tariffs will impact the market competitiveness of OEMs, including those located in (the Eastern Cape).” This year, the Naacam Show is taking place in Gqeberha in the Eastern Cape, displaying the capabilities within South Africa’s leading manufacturing sector. TASEZ, too, is attending the Naacam Show, sharing information about the special economic zone. Emphasising the tone set the day before by the Minister of Trade, Industry and Competition, Parks Tau, Ndabeni emphasised that failure to position the country strategically and reprioritise aspects of the South African Automotive Master Plan, could see us falling behind. “This is something all of us need to galvanise around,” she said. “We know we need to tweak our model. Rebates on imports have improved the competitiveness of OEMs, but have not enabled the development of local supplier capabilities. “We haven’t built the necessary capabilities in design and innovation, and in specialised components.” The Naacam Show, the minister noted, is more than an industry exhibition. It is a platform to benchmark where South Africa stands as a supplier of components, and provides insights into what the government, original equipment manufacturers, and representative bodies like Naacam need to do to position themselves in a rapidly changing industry. “The overall competitiveness of the South African automotive sector depends on the extent to which we can master vertical integration across the value chain,” Minister Ndabeni added. “Shared economic infrastructure like automotive supplier parks and special economic zones have played an enabling role in promoting such integration, as have industry clusters.” Like the Tshwane Special Economic Zone (TASEZ), the Department of Small Business Development is committed to the inclusion of small, medium, and micro enterprises (SMMEs), including the automotive sector. “The reality is: without deep transformation, the sector will not meet the inclusive growth targets set out in the South African Automotive Master Plan 2035 (SAAM 2035,” Ndabeni said. With its focus on developing SMMEs, the Department of Small Business Development, together with the Automotive Industry Development Centre (AIDC) and the International Labour Organisation (ILO), completed a detailed feasibility study for the establishment of a Gauteng-based automotive cluster. “The study confirmed that such a cluster is not only feasible, but strategically necessary to address coordination gaps, improve supplier readiness and deepen SME integration in the value chain, especially the production of high-quality components by SMEs.” In addition, department, through the Small Enterprise Development and Finance Agency is leveraging strategic partnerships to support SMMEs through: “These partnerships are grounded in co-investment, shared learning, and the common goal of expanding opportunities for small businesses in the automotive space.” The Department of Small Business Development also has targeted financial tools to help SMMEs, such as: The minister pointed out that in her 2025/2926 budget vote speech, she announced that the department would support one million SMMEs. “I announced the establishment of a development fund, capitalised at R2.95-billion over the medium-term expenditure framework (MTEF), targeting new entrants, including micro and informal businesses,” Ndabeni said, encouraging micro enterprises in the automotive after-care and services market to apply. Announced at the same time were the establishment of a commercial fund for more high-growth SMMEs capitalised at just under R1-billion over the MTEF, a women’s fund capitalised at R300-million, and a youth fund also capitalised at R300-million. Ndabeni also spoke about South Africa’s Presidency of the G20 this year, noting that the Department of Small Business Development would leverage South Africa’s role to position SMMEs and startups as critical levers of innovation-led industrialisation that diversifies and decarbonises the economy. “This is especially relevant in sectors like automotive manufacturing, where innovation, localisation, and inclusive industrialisation go hand in hand. You cannot do one without the other, and we must build a coherent ecosystem to enable such integration.” The minister concluded her address, emphasising the country’s commitment to ensuring SMMEs are at the forefront of the industry, as innovators and entrepreneurs, as small producers, as solution providers, and as global players.

SA’s auto industry is the backbone of the country’s economic growth

News / By Tasez

By Mandla Mpangase The automotive industry holds significant potential for shared prosperity through targeted industrial development, according to South Africa’s Deputy President Paul Mashatile. He was delivering the keynote address on 14 August 2025 at this year’s Naacam Show, currently taking place in Gqeberha, in the Eastern Cape. The automotive sector is one of South Africa’s most strategically important and internationally linked industries, accounting for 22.6% of manufacturing output and 5.2% of the country’s gross domestic product. Although the sector is a success story of industrial policy, it is important to increase employment in the sector. Currently, 115 000 people are employed in the sector, with more than 80 000 of those working in component manufacturing. The deputy president noted that the industry is export-oriented, globally competitive, and plays a vital role in regional and national industrial development. In 2024, the component sector exported R62.5 billion of components. “We must never allow the loss of these gains because of external and internal pressures. I say this with concern because the employment levels in the sector have been under strain due to ongoing economic pressures and reduced production volumes.” Naacam, the National Association of Automotive Component and Allied Manufacturers, recorded 12 company closures over the past two years, affecting the livelihoods of 4 000 individuals. “What is of more concern are the recently released figures by Statistics South Africa showing that the country’s unemployment rate has climbed to 33.2% in the second quarter of 2025, an increase from 32.9% in the previous quarter,” Mashatile said. “This latest figure is a clear indication that the nation’s unemployment crisis remains an urgent concern.” More effort is needed to combat unemployment, including improving education and skills to match labour market demands, promoting entrepreneurship and small enterprises, and investing in public employment programmes to generate jobs. TASEZ is currently attending Naacam to share knowledge and monitor the latest developments and trends in the sector. The deputy president noted that the government supports the automotive industry through a combination of investment incentives, improved policy frameworks, and infrastructure development, including: Guiding the sector is the South African Automotive Master Plan 2035 (SAAM), which aims to build a globally competitive and transformed industry. SAAM goals include growing vehicle production to 1% of global output (1.4 million vehicles), increasing local content to 60%, doubling employment to 224,000 employees, and deepening transformation and value addition, with 25% Black-owned involvement at the Tier 2 and Tier 3 component manufacturer level. The Automotive Production Development Programme Phase 2 is the policy programme intended to support and enable the realisation of the objectives of SAAM. “We recognise the industry’s significant role and see it as the backbone of our economic growth, promoting industrial development and encouraging innovation,” Mashatile said. “I am of the view that by increasing investment in research and development, we can use the power of technology to improve efficiency and sustainability, ensuring that our products and services stay competitive in the global market.” New opportunities for growth could be unlocked through nurturing a culture of collaboration and partnership among manufacturers, suppliers, and stakeholders, he added. Support for the African Continental Free Trade Area “This sector, not just in South Africa but in Africa as a whole, has emerged as a critical area of investment, providing substantial prospects for growth and development.” In this context, it was important to acknowledge the significance of the African Continental Free Trade Area (AfCFTA) agreement on economic integration and industrialisation, which is projected to draw additional international investment into the African automotive industry. “The agreement has the potential to significantly boost the automotive industry across the continent by reducing trade barriers, fostering regional value chains, and harmonising regulations. This could lead to increased production, lower costs for consumers, and a more competitive market.” The implementation of the agreement has the potential to lessen the dependency of African countries on developing countries for automotive components and completed vehicles by promoting regional value chains and increasing local production. “Creating a single continental market for goods and services could potentially lead to increased trade, investment, and job creation within Africa.” However, Mashatile added that this does not suggest that South Africa does not need other nations as trading partners. “We believe in diversifying our investments and engaging in trade with several partners.” Mashatile explained that the Cabinet has adopted a new trade proposal to the United States that aims not just to settle the 30% tariff but also has ramifications for over 130 other trading partners who may reroute products into the South African market. “I must highlight that there will be repercussions felt throughout the entire value chain if we do not reach an amicable trade agreement with the White House. “It is probable that South African suppliers who provide support to domestic original equipment manufacturers that export automobiles or integrated systems to the United States would experience volume cutbacks. This will put pressure on production planning, employment decisions, and investment choices.” The tariffs threaten to disrupt well-established trade flows and weaken the global competitiveness of South Africa’s automotive manufacturing ecosystem. “However, South Africa remains resilient and steadfast in its efforts to grow and protect our economy. We will continue engaging with the USA to identify practical solutions.” Attracting significant investment and driving innovation could strengthen South Africa’s manufacturing capabilities and global competitiveness. Proactive transformation of the sector “We can increase localisation with existing and potential new original equipment manufacturer entrants to market, achieving a 5% growth in South Africa’s localisation rate, potentially resulting in R30-billion in new local procurement.” In addition, research has indicated that South Africa is well positioned to localise high-value new energy vehicle components, including fuel cells, thermal management systems, e-axle and high-voltage battery mineral beneficiation and assembly. “At the heart of our vision for the automotive industry is a commitment to shared prosperity. We believe that sustainable development must benefit all members of society, empowering individuals and communities to thrive and succeed.”

SA’s automotive sector can model African industrial resilience, says Minister

News / By Tasez

By Mandla Mpangase The annual Naacam Show takes place at a defining moment for the South African automotive sector, which is facing intersecting challenges that demand collaboration. With these words, Minister of Trade, Industry and Competition, Parks Tau, began his assessment of the automotive manufacturing sector in a keynote address to the Naacam audience in Gqeberha on 13 August 2025. This year’s show brings together automotive component manufacturers, public and private sector stakeholders, and service providers to foster collaboration, with the aim of galvanising the industry around the goals outlined in the South African Automotive Master Plan 2035. The automotive manufacturing sector is the cornerstone of South Africa’s manufacturing economy, contributing 5.2% to the country’s gross domestic product and 22.6% of the country’s industrial output. Despite these significant numbers, the industry faces several interconnected challenges, the minister noted. “Yet within these challenges lie transformative opportunities to redefine and leverage our global competitiveness.” The minister went on to urge all stakeholders to unify their actions across three pillars: on localisation, innovation, and inclusive transformation. Urgent challenges Although the industry employs 115 000 South Africans directly, with over 80 000 in component manufacturing alone, it faces the stark reality that domestic sales of locally produced vehicles plummeted to 515 850 units in 2024, far below the South African Automotive Master Plan 2035 (SAAM) target of 784 509. In addition, Minister Tau noted: “Importantly, 64% of vehicles sold here are imports, eroding local production scales.” Local content remains stagnant at 39%, well short of the 60% target, he said, adding this was at a time when United States tariffs are impacting significantly on the country’s R28.7-billion automotive exports. These pressures have triggered 12 company closures and over 4 000 job losses in two years. The erosion of the industrial value of the sector is exemplified by recent suspensions at Mercedes-Benz and other original equipment manufacturers. The path forward: Strategic imperatives “Localisation is not merely policy compliance, it is existential,” Minister Tau said. “A 5% increase in local content would unlock R30-billion in new procurement, dwarfing the R4.4-billion US export market.” However, to achieve this, “we must act collectively to address some of the bottlenecks to growth”. With this in mind, the Department of Trade, Industry and Competition is reviewing the Automotive Production Development Programme (ADPD) as a comprehensive way of responding to the challenges the sector is facing, but also to ensure regular growth in the sector meets the goals of the SAAM. Some of these reforms include the incentive structure and shifting duty credits to reward manufacturing instead of assembly credits. “Our critical minerals and metals strategy will prioritise beneficiating platinum group metals, copper, and manganese for high-value new energy vehicle components like fuel cells and batteries.” Digitisation, decarbonisation, and diversification – global competitiveness hinges on embracing disruption “At the dtic, we have been engaged on a path of developing a new industrial policy which focuses on decarbonisation, digitisation, and diversification. “As Naacam notes, carbon has become ‘part of the cost of doing business and increasingly, part of the value too’.” As the globe shifts to new energy vehicles and competition from China, it is crucial that South Africa scale new products such as e-axles and thermal systems, and markets, particularly under the African Continental Free Trade Agreement. Referring to development around new energy vehicles, the minister reported that amendments of the automotive production and development programme phase 2 legislative framework for the inclusion of electric vehicles and associated components have been completed. In addition, the relevant amendments to the existing Automotive Investment Scheme (AIS) guidelines are being finalised to align with APDP2 amendments and the energy vehicle legislative framework. “The Taxation Laws Amendment Act, gazetted on 24 December 2024, introduces a 150% capital allowance for qualifying investments in energy and hydrogen vehicle production. It covers assets such as buildings, plant, and equipment brought into use between 1 March 2026 and 1 March 2036.” A critical minerals strategy and battery value chain master plan are also being developed. A comprehensive skills gap analysis was completed under the energy vehicles skills workstream. Curricula and certification programmes are now being developed with Tshwane University of Technology, Cape Peninsula University of Technology, Durban University of Technology, and Unisa. A pilot project involving 100 students is expected to be rolled out in Q1 of 2026 once the academic materials are finalised. Transformation: Scale, skills, and equity “We have walked a long journey with the automotive sector on transformation. It therefore goes without saying that inclusion drives growth.” SAAM’s target of 130 new black-owned manufacturers is advancing, with 26 black-owned small, medium, and micro enterprises (SMMEs) exhibiting at the 2025 Naacam Show. However, the pace needs to be picked up. “To this end, we are hopeful that the industry will support the endeavour of the Transformation Fund that we are pursuing at the dtic with the view to enhancing overall transformation through Enterprise and Supplier Development (ESD) funds.” The minister added: “We need to accelerate skills development to ensure that we prepare our labour force for the dramatic changes that artificial intelligence will bring into the sector.” The government is also working hard to eliminate compliance burdens and reduce red tape, which inhibits investment into the country’s automotive sector. “Our policy response is accelerating, and we plan on introducing an Omnibus (General Laws Amendment) Bill, which looks to fast-track high-impact investments and projects within 90 days.” In addition, the government is looking at the impact of imports into the country and the impact they are having on local production. “We want to grow the sector, so our first option must not be to wield a stick but rather offer a carrot to these companies to attract more investment into the country, thereby increasing the value-add of particularly our component manufacturers.” Minister Tau also encouraged the industry to accelerate collaboration. “OEMs need to continue to honour local procurement targets and mentor and invest in SMMEs.” Tier 1 Suppliers must drive equity partnerships and Tier 2/3 development. “Naacam’s