South Africa has secured new commitments from Chinese and Indian automakers to upgrade their semi-knocked-down assembly operations in the country to full complete-knocked-down manufacturing, Trade Minister Parks Tau announced. The agreements involve Beijing Auto Industrial Corporation in Gqeberha and India’s Mahindra in Durban, Reuters reported.
The government explained that the deals followed recent engagements with industry leaders in China and India and align with its strategy to strengthen South Africa’s industrial base and position the country as a leading manufacturing hub in Africa. Tau said companies operating under semi-knocked-down arrangements have now committed to transition to full vehicle assembly using locally delivered parts.
Industry leaders have raised concerns that the domestic auto sector risks being undermined by rising imports. Toyota South Africa’s chief executive noted that the market share of locally fully assembled vehicles has fallen sharply from 56 percent to 33 percent in less than two decades. Without intervention, analysts warn South Africa could lose its position as Africa’s top vehicle producer to Morocco.
Economists argue that government backing for manufacturers, supported by these new investment deals, could stabilise the industry. Challenges remain around tariff structures, growing import competition and the rapid shift toward electric vehicles. If successfully managed, however, the transition to full manufacturing could safeguard jobs, expand value chains and strengthen South Africa’s competitiveness in global automotive markets.
