Gauteng assesses its readiness for a transformed automotive sector

4 September 2025

By Mandla Mpangase

Gauteng has ambitious plans to turn the province into the automotive hub of Africa.

So serious is the intention, that the leading role players in the South African automotive sector gathered in Johannesburg to share insights into what is needed to make that happen.

This comes amidst a rapidly evolving global automotive sector, the looming carbon neutral targets for vehicle imports into the European Union by 2035, and the current turmoil surrounding increased tariffs being imposed on goods entering the United States.

Addressing the participants at the Automotive Sector Policy Dialogue, Gauteng’s MEC for finance and economic development, Lebogang Maile, emphasised the significance of the sector to the country’s economy.

In 2024, the automotive industry contributed 5.2% towards the GDP of the country, with 110 000 direct jobs – 33 154 in the original equipment manufacturers and 81 860 people employed by component manufacturers.

Gauteng is home to three original equipment manufacturers, Nissan, Ford, and BMW – all based in the City of Tshwane along with the Tshwane Automotive Special Economic Zone and the Automotive Industry Development Centre.

Together, the three OEMs produced 1.8 million vehicles between 2014 and 2023, accounting for 32.8% of South Africa’s vehicle production.

“According to the National Association of Automobile Manufacturers of South Africa (Naamsa), Gauteng’s automotive sector is expected to gain momentum, especially with the establishment of the Tshwane Automotive City (TAC), which will serve as an integrated logistics framework focusing on inland ports and manufacturing hubs linked to rail corridors linking Tshwane with strategic ports in South Africa and SADC (the Southern African Development Community),” MEC Maile noted.

A different-looking automotive sector

Speaking on the shift from internal combustion engines towards new energy vehicles (NEVs), Maile spoke of the urgency required by the automotive sector to adjust its production value chains and technologies to transition towards NEVs to retain and grow its existing markets share.

He also identified the challenges the automotive sector faces, including:

Gauteng being a landlocked province far from regional seaports, faced with logistical challenges that often lead to expensive transportation costs to reach global markets;
Congestion at South Africa’s ports has a negative impact as the automotive sector relies on international trade in terms of sourcing manufacturing components and shipping the final product;
Inconsistent electricity supply;
A lack of support for Tier 2 and Tier 3 manufacturers;
OEMs battling technological challenges that come with transitioning to NEVs, which require high technical and technological skills;
The recent 30% tariffs imposed by the United States on South African exports poses a risk to the sector, puts pressure on the local OEMs, and poses a risk to jobs; and
Transformation is happening at a snail’s pace, which stifles the growth of township businesses.

What this all means, Maile told the participants, is that a different approach was needed to support and develop the sector.

“There is a need for an inclusive approach towards transforming the sector.”

While the province had made progress in terms of establishing the AIDC supplier park and the development of TASEZ, much more needed to be done to make the sector competitive, MEC Maile said.

The dialogue was held to assess the province’s readiness for the NEV transition; to identify the infrastructure investment requirements for the transition; gather information into the support requirements for Tier 1, Tier 2, and Tier 3 component manufacturers; highlight skills requirements, funding collaborations and partnerships to support the transition; and understand the implication of US tariffs and potential new markets for South African OEMs.

In line with the discussion on NEVs, the province will host the inaugural NEV Summit in October, where industry players will share further knowledge on the sector.

For further information on the NEV Summit visit the AIDC website.