14 April 2023

Investment in the automotive sector is crucial to transforming and growing South Africa’s economy in the long-term.

South Africa’s 2023 Investment Conference focused the spotlight on the various economic opportunities available across the country – including the crucial automotive sector.

Investment is critical to growing South Africa’s economy, expanding business, and creating employment, particularly for young citizens.

The Tshwane Automotive Special Economic Zone (TASEZ) used the conference, held in Sandton on 13 April, to showcase why investors should consider locating their manufacturing business to Africa’s first automotive hub.

“TASEZ provides a unique offering: a location that is easily accessible, with infrastructure to support any Fourth Industrial Revolution requirements, and a locally-based skilled labour force,” says TASEZ CEO Dr Bheka Zulu.

In addition, investors are able to access a number of government supported incentives, including favourable tax rates and subsidies for infrastructure development.

The latest investment conference was the last leg of South Africa’s drive to attract R1.2-trillion over a five-year period. Since 2018 South Africa has attracted commitments totalling R1.14-trillion, 95% of the set target.

More than 200 international delegates from 40 countries across the world attended the conference, including investors from 10 other African countries.

Addressing delegates at the conference President Cyril Ramaphosa said the target had been reached and plans were in place to get an R60-billion in pledges from domestic and international investors.

The president has now set a new target of raising investments worth R2-trillion over the next five years.

Of the R1.2-trillion pledges, about R460-billion has been invested in building new factories, buying equipment, building roads, sinking mine shafts, and rolling out broadband infrastructure so far.

While investments cover a wide range of sectors, the manufacturing sector has a key role to play in expanding and transforming the country’s economy, creating jobs, growing locally made products, and encouraging business opportunities.

And the automotive sector is an important part of the manufacturing sector. “It is the most important manufacturing sector in the country, contributing 4.3% to South Africa’s GDP in 2021,” Dr Zulu noted. In 2021, vehicles and automotive components worth a record R207.5-billion were exported – 12.5% of South Africa’s total exports.

New investments are integral to creating sustainable jobs, reducing poverty, and driving back inequality, as articulated in the key government strategy outlined in the National Development Plan.

“Such investments,” Dr Zulu said, “play an important role in the automotive sector, helping increase local production and encouraging efforts to buy local – a critical pillar of the Automotive Industry Master Plan.” The master plan aims to guide the development of the country’s automotive value chain through to 2035.  

One of the focus areas for TASEZ is the development of small, medium, and micro enterprises (SMMEs), who are seen as central to transforming and growing South Africa’s economy.

In fact, the Minister of Trade, Industry and Competition, Ebrahim Patel also noted this important cohort during his welcoming address at the conference. He described the small business as “providing important services to communities and large businesses who employ millions of citizens”.

Despite the challenges presented by ongoing power outages, Ramaphosa was adamant that South African is “an ideal investment destination”.