Automotive OEMs Central to South Africa’s Trade Strategy as NAAMSA Backs SONA 2026 Commitments
South Africa’s automotive sector – anchored by global Original Equipment Manufacturers (OEMs) – remains one of the country’s most strategically important industries for trade, industrialisation and employment. In response to the 2026 State of the Nation Address (SONA), NAAMSA welcomed government’s renewed commitment to protect domestic manufacturing, enhance competitiveness and support a pragmatic transition to new energy vehicles, underscoring the sector’s vital role in the country’s export mix.
For South Africa, automotive OEMs are far more than assembly operations. They sit at the centre of complex global value chains that link local component manufacturers, logistics providers, ports and international markets. As a result, policy certainty affecting OEM investment decisions directly influences export performance, foreign direct investment flows and the country’s standing as a manufacturing hub serving Europe, Asia and the rest of Africa.
Manufacturing protection and trade positioning
Government’s pledge to close tariff loopholes and strengthen industrial policy was particularly welcomed by the industry. In an era of intensifying global protectionism and excess manufacturing capacity, maintaining domestic production scale is critical if South Africa is to retain its position as a preferred destination for OEM production platforms.
The automotive sector contributes 5.2% to GDP and accounts for nearly a quarter of manufacturing output – making it one of the country’s most significant industrial clusters. More importantly for trade strategists, vehicles and components exports reached a record R268.8 billion in 2024, representing 14.7% of total exports and reaching 155 global markets. This places automotive OEMs among the single largest contributors to South Africa’s export earnings.
NAAMSA emphasised that trade policy must remain calibrated and compliant with World Trade Organization rules while safeguarding long-term industrial sustainability. Policy coherence and stability, it noted, will determine whether multinational parent companies continue allocating future vehicle production to South African plants rather than competing jurisdictions.
Energy transition and future investment
The announcement of a 150% tax deduction for New Energy Vehicle (NEV) investment signals government’s intent to secure the next generation of automotive manufacturing. For OEMs deciding where to build electric, hybrid or plug-in hybrid models, incentive structures and regulatory clarity are decisive.
NAAMSA stressed that South Africa’s transition must be technology-neutral and export-aligned. Because the country produces primarily for foreign markets — particularly regions with strict emissions regulations — failure to adapt could see OEMs shift production elsewhere, eroding a cornerstone of the nation’s trade balance.
Investment decisions on future vehicle platforms are being made now, the organisation warned, meaning delays in policy implementation could cost the country billions in future exports.
Infrastructure as a trade enabler
Beyond incentives, logistics performance remains a critical constraint. The automotive sector is highly sensitive to port efficiency, rail reliability and energy stability. Improvements in these areas would not only lower export costs but also strengthen South Africa’s competitiveness against emerging manufacturing rivals.
With approximately 115,000 people employed in vehicle and component manufacturing — and nearly half a million jobs supported across the economy — the stakes extend well beyond the factory floor. Automotive OEMs anchor supplier networks, skills development and technology transfer, making them indispensable to broader industrial policy objectives.
A strategic asset in global trade
For the SA Trade Desk audience, the message is clear: the automotive industry is not simply another sector lobbying for support. It is a strategic trade asset that integrates South Africa into global production systems. Protecting and expanding OEM presence locally is therefore synonymous with safeguarding export growth, industrial capability and long-term economic resilience.
As global supply chains reorganise and countries compete aggressively for advanced manufacturing investment, South Africa’s ability to retain its automotive edge may well determine its future position in international trade.
