Sector profile
The automotive industry: a pillar of the South African economy
The automotive industry is an important pillar in the South African economy:
The industry is the largest manufacturing sub-sector, contributing approximately 6.9% to the country’s GDP (AIEC Export Manual, 2018). The industry employs in the region of 110,000 people across OEM’s and automotive component manufacturers and has an annual production amounting to approximately 573,611 vehicles(AIEC Export Manual, 2018). 58.7% of locally produced vehicles were exported in 2017 (AIEC Export Manual, 2018).
%
% of South Africa's GDP
thousand individuals employed by industry
thousand vehicles produced annually
The multiplier effect on the domestic economy
Traditionally the automotive industry has had a large multiplier effect on the domestic economy with its impact extending far beyond manufacturing to include sizeable contributions from automotive retail and associated services. Additionally, a number of sectors have developed in response to the local automotive industry, for example, light engineering, plastics manufacturing, electronics assembly etc., further adding to the indirect contribution of the sector to the economy.
The largest domestic market for vehicles in Africa
South Africa represents the largest domestic market for vehicles in Africa, and is the continent’s biggest producer. South Africa’s trade environment opened up rapidly in the early 1990s as the country integrated into the global economy after years of isolation. The impact of this liberalisation on the South African automotive industry is evident in both the domestic and export markets, with over half of all vehicles produced in South Africa now exported.
The South African Automotive Industry
The South African automotive industry is comprised of seven major vehicle assemblers, thirteen assemblers of heavy and medium commercial vehicles, and approximately 360 component manufacturers. The value chain is primarily driven by the seven OEMs, BMW, Nissan, Ford, Volkswagen, Isuzu, Mercedes-Benz, and Toyota, and is clustered into four primary geographic areas, each home to one or more OEM:
GAUTENG
Gauteng has the largest concentration of automotive manufacturing in South Africa, with three OEMs (BMW, Ford and Nissan) and approximately 40% of the South African automotive components industry.
PORT ELIZABETH/ UITENHAGE
Port Elizabeth/Uitenhage is home to Isuzu and Volkswagen, and about 30% of the automotive components industry.
KWAZULU-NATAL
KwaZulu-Natal (primarily Durban, but also Pietermaritzburg) is home to Toyota’s assembly plant, South Africa’s largest producer of vehicles, and approximately 20% of the automotive components industry.
EAST LONDON
East London is the residence of Mercedes-Benz’s assembly plant and roughly 6% of the automotive components industry.
