Nelson Mandela Bay power crisis puts the brakes on auto industry

Nelson Mandela Bay’s failing electricity infrastructure is battering industries in the city, stifling production and eroding the metro’s global competitiveness.

Unplanned outages, failing pylons and years of neglect have turned power supply into a full-blown crisis — one that can result in production losses for auto manufacturers to the tune of hundreds of vehicles in a matter of hours.

It is forcing them to spend millions of rand to survive a system they call a disaster.

On Wednesday, parliament’s portfolio committee for trade, industry and competition visited the Volkswagen Group Africa plant in Kariega.

They conducted a plant tour led by VWGA managing director Martina Biene.

Committee chair Mzwandile Masina led the parliamentary delegation.

The visit also comes after Biene wrote to President Cyril Ramaphosa late in 2025 requesting an urgent discussion around the state of the South African automotive industry.

In January, industry leaders appeared before Masina’s portfolio committee.

They outlined their challenges and spoke about the impact of vehicles imported from China and India.

Biene confirmed she wrote to Ramaphosa late in 2025, stressing that decisions being made now would determine whether new models were produced in SA by 2030 as global headquarters demanded clear, immediate proof the country was serious about supporting local manufacturing.

“Mainly, the motivation for me was that our investment cycles, as an industry not as Volkswagen, the industry investment cycles are really long,” Biene said.

“So I’m now pitching for an investment in 2030 and I need that approval now.

“It seems quite long, but if Volkswagen does not consider spending money on SA, then I won’t be able to launch a new car in 2030.

“When we went to our headquarters to pitch, they told us clearly we must see some significant changes in the SA automotive policy to show and to demonstrate that South Africa really wants local manufacturing.

“We started that discussion eight months ago, when there was the NAACAM show here in Gqeberha."

She said they underwent more discussions, but she felt she should be able to showcase not only talks, but the first steps.

“So to make that very clear, and to go to the highest person in this country to showcase that urgency, is why I wrote a letter to the president, and it was not really about complaining.

“We as an industry are very much aligned with the manufacturing industry.

“So the proposals are all around.

“We must have a debate in the country on SKD [semi-knocked down] manufacturing in the passenger car space.”

She said there were also proposals around government and preferential procurement of local manufacturers.

“So there are a lot of proposals that can be done without spending more money, it’s just reallocating resources, but it needs to be modelled, and consultation needs to happen.

“That was the reason for writing to the president.”

During a media briefing, Biene said manufacturers across the city were grappling with ongoing challenges caused by unplanned power outages.

“It’s all about the cost of doing business in SA and cost competitiveness towards other destinations such as India and China to level the playing field.

“A lot of things on this cost competitiveness can be done at a national level, but of course, part of cost competitiveness needs to be managed within the municipality, for example, such as a stable electricity supply.

“We acknowledge that load-shedding has been less, but we did invest in these generators which added to our costs back then.

“Now we’ve got the decay in electrical infrastructure, and we’ve had another pylon collapse, and I’m sitting with no electricity in Summerstrand.

“Unplanned power outages are even worse for running a production because when it’s unplanned, in the body shop, 587 robots stop at different times.

“Even if the power outage is only 20 minutes, until we ramp up the body shop again to bring all the robots in order, it takes us two to three hours, and we lose probably 200 to 300 cars.

“We’ve had to install a UPS system, so when it happens, we’re able to, in a controlled manner, ramp down the body shop.

“The electricity infrastructure, I would say, is a disaster in Nelson Mandela Bay and needs urgent maintenance, which is what I raised, as well as the performance of the ports.”

Masina acknowledged the auto industry was facing challenges, adding they would be interacting with the municipality and provincial government.

“We were joined by the head of the department of economic development, and we will sit down and ensure we interact with them because what is important is that your big clients, you service them, you protect them, you work with them to resolve some of the challenges because local government is facing a challenge of ageing infrastructure.”

Following the appearance of OEMs in January, Masina said the committee had compiled a report that would be handed over to parliament with “far-reaching” recommendations.

Masina said the government was concerned about Asian companies flooding the market, but added that SA was an open and competitive economy.

“We’ve looked into some of the factors that are contributing.

“For instance, we’re informed that, in terms of the labour cost, in India, as an example, it is 35% cheaper to produce a car there because of its labour laws.

“We know that in SA we came from a very dark past, so we had to tighten our labour laws.”

He said it would be important to strike a balance between labour laws and ensuring there was affordable production in SA.

“What we encourage is far-reaching government support, which must be given to the auto sector to ensure that they are protected, but we can also manage some of the costs that are critical,” Masina said.

Nelson Mandela Bay Business Chamber chief executive Denise van Huyssteen said the lack of reliable electricity, reflected in the high number of unplanned power outages and power dips, was of major concern.

“They have a direct impact on the viability of business operations and their ability to sustain much-needed jobs, in a metro which has an unacceptably high official unemployment rate of 27.1%.

“Businesses across key sectors, and from small to large operations, continue to bear the brunt of the lack of proactive maintenance of the metro’s electricity, water and sanitation infrastructure.

“This results in lost sales, cancelled bookings, damage to equipment and machinery, scrap, production delays, an inability to meet customer demand and export orders, and an increase in the overall cost of doing business.

“The broader consequences are far-reaching, including reputational damage to the metro as an investment destination.”

Van Huyssteen said with regard to the latest protracted power outage, which lasted five days, commercial enterprises — particularly those in the hospitality sector — were the hardest hit, alongside institutions caring for vulnerable residents such as old age homes and other care facilities.

“Since January 2023, the chamber has recorded 202 unplanned outages across key industrial and commercial areas, an untenable reality for a metro which is anchored around the manufacturing sector, and which is already under immense pressure due to geopolitical shifts, the influx of imported products into the market, logistics challenges and the energy security issues of the last few years,” Van Huyssteen said.

Municipal spokesperson Sithembiso Soyaya said the city recognised the automotive sector’s critical role.

He said they were taking steps to stabilise the power supply amid mounting pressure from industry.

“We acknowledge that any unplanned power interruption can be disruptive, particularly for large-scale manufacturing operations where production stability is critical.

“The municipality takes these concerns seriously and continues to prioritise the stability and reliability of electricity supply across the metro, including areas that support key economic activity.”

Soyaya said electricity supply disruptions could arise from a range of technical and grid-related factors, including broader network conditions and faults that occasionally occurred within complex electricity infrastructure systems.

“When such incidents occur, municipal electricity teams respond urgently to restore supply and minimise the duration of outages,” Soyaya said.

“Importantly, the municipality’s future budget allocations will reflect a clear commitment to stabilising electricity supply through increased investment in electricity infrastructure maintenance, upgrades and network strengthening.

“These investments are aimed at improving reliability, enhancing system resilience and ensuring that Nelson Mandela Bay continues to position itself as a competitive and reliable environment for industrial investment.”

Meanwhile, passengers flying in and out of the Chief Dawid Stuurman International Airport in Gqeberha were greeted by complete darkness inside the terminal on Wednesday as large parts of Nelson Mandela Bay were once again left without electricity.

Affected areas include Summerstrand, Walmer and Amsterdamhoek.

The municipality said the power outage was caused by the tripping of the 132kV circuit breaker at the Chelsea and Arlington substations.

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