As tensions between original equipment manufacturers (OEMs) and companies importing partially assembled vehicles into SA built up this week, trade and industry minister Parks Tau announced a push from the government to get Asian firms to invest locally.
The OEMs, assembling vehicles from the ground up through completely knocked down (CKD) production, say they are being undercut by a surge of cheap imports from China and India.
The influx, they argue, is eroding their share of new vehicle sales and undermining efforts to grow SA’s own automotive base.
Tau said that despite the challenges facing the sector, the shifting landscape presented opportunities, and the government was doing its part to support them.
He spoke on Thursday at the 2025 Auto Week at the Coega Vulindlela Centre in Gqeberha.
In the short term, Tau said, his department was working with China and India to boost local automotive production through direct investment.
“Both those markets and companies that now have semi-knocked-down (SKD) operations in SA have committed to transition to CKD,” he said.
“Our duty is to work with these companies to ensure that we can reach that stage where they become part of the local production capability to support, of course, the South African industry.
“But also to take advantage of SA skills and expertise as a platform from which they can grow access to markets, taking advantage of the African continental future in that area.
“They have also committed to either co-operate with existing OEMs and use excess capacity with OEMs, or build new factories in SA.
“Of course, at the right time, the right announcements will be made.”
His remarks come amid speculation that Chinese automaker Chery is considering building a plant in SA.
In August, Eastern Cape premier Oscar Mabuyane said the government was working to revive a multi-OEM manufacturing model, enabling other carmakers, including Chery, to use Mercedes-Benz SA infrastructure to produce vehicles.
Discussions on the sidelines of Auto Week were that a deal was gaining traction with Chery.
It is understood that Tau held a behind-the-scenes meeting with Chery SA chief executive Tony Liu on Thursday.
A delegation from the provincial government, led by acting premier Mlungisi Mvoko, met Liu briefly after his meeting with Tau.
While it is believed Chery is looking to invest in SKD, the government is pushing for a CKD investment.
Without confirming discussions about Chery, Naamsa chief executive Mikel Mabasa said many vehicle companies were protecting their own interests.
“We are seeing that in China, where they protect their own bases,” he said.
“SA must take steps to protect the automotive sector.
“It contributes 5% to the GDP.
“A lot of people are employed across the value chain.
“We need to not only preserve but also create new jobs.”
Mabasa said that while Auto Week confirmed its intention to bring vehicles into the country, the key message from the conference was that these vehicles must come with a commitment to invest in SA, not flood the market.
Without naming any brands, Mabasa said companies had indicated they would like to set up in SA.
“They have taken steps to engage with the government.
“We are encouraged that companies are interested in setting up.”
He said some OEMs had enough space to accommodate other manufacturers.
“They were developed to ramp up production and have not produced as many as they thought they would.”
He said these companies encouraged others to visit their facilities.
Earlier, Numsa criticised the government for “kicking the can down the road,” while Chinese and Indian carmakers tightened their grip on the SA auto market, warning that local manufacturing could collapse unless authorities curbed cheap tyre imports and compelled Asian brands to expand production locally.
Numsa general secretary Irvin Jim said Asian car brands were flooding the SA market, with local component content manufacturing dropping from 43% to 39%.
Jim said it was time to take stock of the level of trade that benefited SA with Brics partners — namely China and India.
“We have effectively lost the domestic market.
“In 2018, both China’s and India’s imports were less than 1%.
“In 2025, both China and India are 26%.”
He said it was time for the government to show decisive leadership.
“Our turnaround time must be sharp and must implement bold industrial policy measures that address both immediate and long-term challenges, securing the future of the sector.
“We can’t have leadership today that is looking around, kicking the can along.
“It’s about time to make decisions.
“Where weakness exists, whether within the automotive sector or the wider economy, the government must lead in partnership with the industry to protect our manufacturing capacity.”
Touching on the closure of the Goodyear SA plant in Kariega, Jim urged the government to take decisive steps against the dumping of tyres in SA.
“We lost Goodyear SA, and when we were under siege of destruction of infrastructure and people looking for steel, we were able to ban an expedition of scrap for a particular period.”
Naamsa president Billy Tom said SA-based firms across the value chain had weathered policy storms before, and while the stakes were high this time, there was a way forward.
“This movement also calls for a broader mindset shift from total dependence on some of our traditional markets to deliberate diversification to new and untapped markets,” he said.
“The African Continental Free Trade Area Agreement offers a unique springboard into new regional opportunities.
“Africa is our new frontier, and this emerging market presents us with unprecedented prospects we should collectively and proudly explore.
“We cannot allow people sitting in Asia to lecture us about Africa. We are in Africa, we are Africans.
“Five of the seven OEMs are producing buggies or life-conditioning vehicles, which are perfect for the challenging African road terrain.
“We have the willpower, the skills, the right products and the capacity to co-create, redefine and reunite this African manufacturing story page by page together.
“Asia and the Middle East remain hungry for quality products.
“By broadening our trade footprint, we will dilute our vulnerability and enhance our global relevance.”
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