Auto manufacturing leaders urge action on investment
By Mandla Mpangase
South Africa’s automotive sector, a key industry for the country’s economy, faces losing ground globally unless decisive action is taken to attract and retain new investment.
This was the central message of a high-level panel discussion at South African Auto Week 2025 taking place in Gqeberha from 1 October 2025.
This year’s South Africa Auto Week, hosted by the Automotive Business Council (naamsa), is being held under the theme “Reimagining the future together – Cultivating inclusive growth and shared prosperity”.
The panel, moderated by Financial Mail and Business Day editor-at-large David Furlonger tackled the topic “Salient ingredients to attract new investment for auto manufacturing in South Africa”.
Furlonger opened the discussion with a stark reminder: while global markets are making inroads with new energy vehicles, South Africa lags behind. “We are very good at coming up with plans, but not so great at implementing them,” he warned. “Now we need action.”
Policy and incentives
The director of advanced manufacturing at Invest SA, an agency of the Department of Trade, Industry and Competition, Rashmee Ragaven, outlined a suite of government programmes, including the Automotive Production and Development Programme and the Automotive Investment Scheme, that have been designed to support manufacturers
Ragaven stressed the importance of partnerships between government and industry, and the role of free trade agreements, skills development, and special economic zones such as the Tshwane Automotive Special Economic Zone based in Gauteng, and the Eastern Cape’s industrial development zone of Coega in anchoring investment.
But Ragaven acknowledged speed is critical to bringing about any change. “The partnerships are there, but the speed of action is even more critical now than ever before.”
The Eastern Cape scenario
CEO of the Eastern Cape Development Corporation, Ayanda Wakaba, highlighted the vulnerability of the province’s automotive industry, long a hub for OEMs such as Mercedes-Benz and VW.
“The market dynamics have shifted so much that establishing an industrial plant today is very different to before.
“We must benchmark ourselves against what other countries are doing,” he said.
While defending the sector remains essential, Wakaba stressed the need to diversify into new industries and leverage digital infrastructure investments in rural areas to broaden economic opportunities.
A call for action
For Andreas Brand, CEO of Mercedes-Benz SA, the formula is simple: action.
He pointed to Mercedes-Benz’s investments in solar energy and skills development through its learning academy as proof that collaboration with government can deliver results.
“Without acting, theory never hits reality,” he said. “We need robust, constructive engagement and specific actions that all parties adhere to. That is what delivers change.”
Mickey Mama, head of department at the Eastern Cape’s Department of Economic Development, Environmental Affairs and Tourism, drew comparisons with Morocco and Eastern Europe, both of which have surged ahead of South Africa in attracting investment.
“Our municipalities take too long to approve applications. Morocco has a turnaround time that outpaces us completely,” Mama said, warning that red tape and a lack of policy clarity on NEVs risked pushing investment elsewhere.
Chinese brands on the lookout for opportunities
South Africa is also facing a wave of interest from Chinese automotive brands, but obstacles remain.
Conrad Groenewald, COO of Great Wall Motors, noted that while Chinese firms are eager to invest outside of China, South Africa’s current policies make it hard to justify the return on investment.
“We compete globally. South Africa is already at a disadvantage being at the tip of Africa. We need policies that allow reasonable returns for investors,” he said.
Groenewald also cautioned that rising import duties and the potential removal of import credit benefits would hurt consumers and deter new entrants.
“Vehicle pricing has already outpaced earnings. If policies change further, it will make it even harder to do business here,” he warned.
Need to strengthen component supplier base
Bronwyn Kilpatrick, CFO of Toyota, stressed the urgent need to strengthen South Africa’s tier two and tier three supplier base.
“In South Africa, our manufacturing pyramid is inverted. Only 20% of value-add comes from local tier two and three suppliers. In Thailand, it’s the opposite, and it’s driven by targeted incentives,” she explained.
Developing smaller suppliers, however, requires long-term commitment, mentorship, and patient capital, she added.
The time to act is now
Across the panel, one complex theme emerged: the need for clear policy, faster implementation, and real partnerships to support both OEMs and suppliers. As Ragaven concluded: “There is a shift in mindset in government, but speed is critical. We cannot afford to wait any longer.”
South Africa’s automotive sector, which contributes nearly 5% to GDP and supports hundreds of thousands of jobs, now faces a defining moment.
Competing nations like Morocco, Thailand, and Eastern Europe have shown what decisive policy and execution can achieve.
South Africa must act – and it must act now – to translate its world-class skills and its hard-earned manufacturing expertise into a future-ready industry.