The South African automotive industry ranks third among the South African economic sectors, after mining and financial services. At present, it is the eighteenth industry worldwide in the production of motor vehicles.
The Automotive Industry Development Program, launched by the South African government in 1995, provided significant incentives to exports and has encouraged worldwide motor vehicle producers to award production contracts to South African plants.
South Africa is engaged in the assembly of motor vehicles and light trucks since 1924. Nowadays, the main international manufacturers –including BMW, Daiman Chrysler, General Motors, Fiat, Ford, Nissan, Toyota and Volkswagen- are concentrated in the Provinces of Eastern Cape, Gauteng and Kwazulu-Natal.
In 2004, South Africa exported fully assembled motor vehicles to 53 countries, among them Japan, United States, United Kingdom, Australia and Germany. Toyota Motor Corporation has chosen South Africa as base for the manufacture of 200,000 vehicles (including Hilux vans and SUV vehicles), 100,000 of which will be exported by 2010. General Motors South Africa has obtained a US$ 2.57 billion contract for the manufacture of 10,000 SUV Hummer HR vehicles per year, to be exported to Europe, Asia-Pacific, Middle East and Africa. As regards passenger vehicles, Daimier-Chrysler South Africa was selected for the assembly of the new generation of Mercedes-Benz Class C, and BMW South Africa will assemble the new Series 3 for sale locally and abroad. Additionally, Nissan South Africa and Ford South Africa have announced the expansion of their programs of exportation of the vehicles produced in South Africa.
Comparative advantages of the South African automotive industry
- Competitive industrial base
- Good infrastructure
- First class production tests
- Emerging market cost advantages
- Flexible production capacity
- Availability of raw material
- Low tool cost
- Official support
Prospects for the South African automotive part industry are encouraging. South Africa has more the 350 manufacturers whose technological capacity allows them to comply with the strictest specifications. Fiat South Africa has announced contracts amounting to US$ 64 million to provide heat insulators for exhaust pipes and parts of catalytic converters to the Fiat plants in Italy. The main exported components are leather upholstery for seats, catalytic converters, tyres, engines, engine spare parts, exhaust pipes, silencers and spare parts. The EU absorbs 70% of the South African exports of components, Germany being the main buyer. Exports to the United Sates have also increased significantly.
The South African Bureau of Standards certifies the quality standards in this industry. The system of registration of its International Standards Organisation (SABS ISO) establishes the correlation between the South African quality control systems and those of other countries. Most of the automotive industry manufacturers and suppliers operate in accordance with the quality and environment protection standards accepted by 117 of the countries to which the vehicles and components made in South Africa are exported.
More information on the South Africa Automotive Industry
- In 2004, South Africa manufactured 84% of all the vehicles produced in Africa.
- There are 7 million vehicles in the South African roads.
- In 2004, the automotive industry contributed 6.7% to the GDP of South Africa and represented 29% of the total South African manufactures.
- In 2004, 110,000 vehicles were exported, 100,000 of which were passenger vehicles.
- In 2003, the South African automotive industry employed 303,000 workers.