SA’s automotive industry, one of the country’s most important economic pillars, is facing a decisive moment as progress under the SA Automotive Masterplan (SAAM) falls behind its strategic targets.
This is according to the BDO SA Research Report: SA Automotive Sector 2024/25, which evaluated the sector’s progress and highlights urgent reforms needed to secure its long-term competitiveness.
In 2024, the automotive sector contributed 5.2% of the country’s GDP, supported over 110,000 direct manufacturing jobs, and accounted for 22.6% of total manufacturing value addition.
Falling short of targets
Since the report is based on 2024/25 stats, lets rather say “When including the retail motor trade, as of 2024 into 2025, the industry employed more than 300,000 people across approximately 23,000 establishments, making it one of the country’s most strategically significant industries.”
However, the report, based on interviews with senior industry leaders and over 200 sector-specific sources, reveals a widening gap between SAAM’s 2035 vision and current delivery.
BDO SA automotive sector lead Siyabonga Mthembu says the credibility of the 2035 vision now hinges on how quickly existing policies are implemented.
“SAAM’s credibility now depends on accelerating the policies already in place. Restoring momentum will require execution-driven renewal rooted in measurable outputs, not aspirational goals,” he says.
Production data highlights the scale of the challenge. SAAM set a target of 784,509 vehicles by 2025, but actual output reached only 599,755 units in 2024, while the first 11 months of 2025 recorded 554,613 units.
The shortfall contributed to a 22.8% decline in automotive exports in 2024.
Localisation targets are also under pressure. The 2024 figures indicate that current local content levels stand between 38% and 42%, below the 48.2% target for 2025.
Supplier transformation is stalling
Employment in the sector currently sits at roughly 115,000 workers, according to the latest data, less than half the 224,000 jobs SAAM aims to support by 2035.
Over the past two years, 12 component manufacturers have closed, resulting in more than 4,000 lost jobs.
Over the past two years, 12 component manufacturers have closed, resulting in more than 4,000 lost jobs
— BDO SA
The report identified transformation as the weakest-performing pillar of the masterplan. Progress towards achieving 15% of Tier 2 and Tier 3 supplier value from black-owned businesses by 2025 has been slow.
Currently, most transformation initiatives remain driven by voluntary original equipment manufacturer-led supplier development programmes rather than systemic financial or industrial policy mechanisms.
Infrastructure: the sector’s most critical constraint
Across all five SAAM pillars, the report identifies structural infrastructure challenges as the sector’s most critical constraint.
Port congestion is extending export lead times by up to 40%, while declining rail capacity and energy instability are forcing manufacturers to rely on costly backup power systems.
These vulnerabilities are particularly acute given that nearly half of SA’s OEM production is concentrated in the Eastern Cape.
EV deadline closer than it seems
The transition to electric vehicles (EVs) adds further urgency to the sector’s challenges.
SA’s automotive export profile remains heavily dependent on European markets, where internal combustion engine vehicle sales will be phased out between 2030 and 2035.
While the 2023 EV White Paper outlined a roadmap for transition, progress has slowed.
Full EVs currently face a 25% import duty, residual values remain uncertain, and SA’s coal-heavy electricity grid weakens the environmental argument for many consumers.
The BDO SA report identifies four priority interventions to close the gap between policy and performance:
- Recalibrate SAAM targets to reflect real-world industry conditions;
- Adopt a technology-neutral new energy vehicle framework supported by early-stage investment;
- Modernise ports, rail, and energy infrastructure through greater private-sector participation; and
- Strengthen supplier development and black-owned enterprise integration, while leveraging the African Continental Free Trade Area agreement to expand African export markets.
“If executed with urgency and coherence, SA can convert this moment of anxiety into one of strategic renewal, preserving its automotive legacy while leading Africa’s next industrial decade,” says Mthembu.
This article was sponsored by BDO SA.
