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Jacqui Moloi - Kuqopheke umlando kwethulwa iziqu ezintsha zochwepheshe bokwakha izinjini zezimoto eNingizimu Afrika

MEDIA RELEASE 5 November 2026 ----------------------------------------------------------------------------------------------------------- AGOA uncertainty reinforces need to strengthen South Africa's local automotive manufacturing base South Africa's changing international trade environment has reinforced the importance of building a more resilient domestic automotive manufacturing base, with greater local content and stronger support for existing manufacturing capability across the full vehicle lifecycle, according to the Retail Motor Industry Organisation (RMI). The recent announcement by the United States government of its intention to withdraw South Africa's preferential access to the US market under the African Growth and Opportunity Act (AGOA) from 1 January 2027 adds further pressure to an automotive sector already dealing with higher trade barriers and increasing global competition. While the impact of the AGOA decision will vary across the automotive value chain, it highlights the importance of strengthening local manufacturing capacity, developing alternative export opportunities and growing the domestic market for locally produced products. NAACAM's recent statement on the planned withdrawal of South Africa's AGOA eligibility also highlighted the gap between localisation ambitions and actual performance. According to NAACAM, the South African Automotive Masterplan (SAAM) 2035 set a target of 48.2% local content by 2025, with an estimated value of R101 billion. However, actual local content stood at 39% in 2025, broadly unchanged from the 38.7% recorded in 2015. Henk Ferreira, Acting Chief Executive Officer of the RMI, says South Africa needs to look beyond new vehicle production when considering how to strengthen localisation and build resilience in the automotive sector. "International trade developments underline how important it is that we build a stronger domestic manufacturing base. While we cannot control trade policies in other markets, we can do more to strengthen local capability, support businesses already operating in the sector and retain more economic value within South Africa. "Localisation should not be viewed only through the lens of new vehicle assembly. There are significant opportunities across the full vehicle lifecycle, including component manufacturing, remanufacturing, commercial vehicle body and trailer manufacturing, maintenance, repair and the development of specialised technical skills," says Ferreira. With *25,139 medium, heavy and extra-heavy trucks and buses sold in South Africa during the first nine months of 2026, an increase of 8.5% compared with the same period last year, the commercial vehicle sector presents opportunities to grow local capability.(Source: naamsa's September 2026 industry new vehicle sales data) However, with sales spread across numerous manufacturers and vehicle platforms, the volumes are unlikely to justify local production of major components such as engines, drivelines and cabs across the different brands. Ferreira believes a more practical approach is to focus on areas where South Africa already has established expertise and infrastructure, including component remanufacturing, commercial vehicle bodies and trailers, shared automotive components and technical skills development. "The opportunity is to build on what South Africa already has, rather than assume that localisation must begin with establishing entirely new manufacturing operations." "Commercial vehicles have long working lives, and significant value is created well beyond the point of initial manufacture. There is scope to retain more of that value locally through remanufacturing, component production, maintenance, repair and the development of specialised technical skills. With the right enabling environment, these activities can support jobs, small businesses, road safety and the resilience of our transport and logistics sector." Remanufacturing offers immediate opportunities Ferreira says remanufacturing is one of the most immediate opportunities. Commercial vehicles contain high-value components, including engines, cylinder heads, turbochargers, diesel fuel injection systems, compressors and braking and cooling components, that can be rebuilt to extend their useful lives. "Remanufacturing retains the engineering and material value already embodied in a component while adding local machining, testing, specialist labour and technical expertise," he says. South Africa already has an established base of capability in this field. The Automotive Remanufacturers' Association (ARA), an association within the RMI, represents automotive engineers, component remanufacturers and diesel fuel injection specialists serving highway trucks, buses, earthmoving equipment and stationary engines. Ferreira says the opportunity is to formalise and expand this capability by strengthening technical standards, improving access to suitable used components for rebuilding, building customer confidence and developing the specialist skills required to support growth. “Recognising remanufacturing as a form of manufacturing within relevant policy and incentive frameworks would also help create a more supportive environment for local businesses investing in these activities,” notes Ferreira Supporting local body, trailer and component manufacturers A second opportunity lies in commercial vehicle bodies, trailers and specialised vehicle applications. Members of the South African Vehicle and Bodybuilders' Association (SAVABA), another of the RMI associations, already manufacture truck bodies, trailers, bus bodies and specialised vehicles, including tankers, tippers, refrigerated bodies, horse carriers, armoured vehicles and emergency services vehicles. These businesses operate within applicable National Regulator for Compulsory Specifications (NRCS) and South African National Standards (SANS) requirements. SAVABA is already engaging with the Department of Trade, Industry and Competition (the dtic) and the International Trade Administration Commission of South Africa (ITAC) on the implications of ready-built vehicle imports for local manufacturing capability. "We believe that where local manufacturers have the technical capability, certification and capacity to produce a vehicle or body to the required specification, this existing capability should be properly considered in trade and procurement decisions," says Ferreira. There are also opportunities to grow local production of components used across multiple vehicle brands, allowing demand to be aggregated rather than relying on the volumes of a single vehicle platform. The Localisation Support Fund's EY study estimates that South Africa's automotive aftermarket was worth approximately R106 billion in 2025 prices and identifies batteries, automotive glass and brake friction products as potential localisation opportunities. Importantly, the study points to opportunities to scale up existing production capabilities rather than relying exclusively on new manufacturing investments. "Localisation must be commercially sustainable. The objective is not simply to manufacture a product locally, but to create businesses that can compete on quality, price, reliability and performance," Ferreira explains. "Where local manufacturers can meet the required standards and compete effectively, we need to create the conditions for them to grow. This includes ensuring that imported products meet equivalent safety and technical requirements." Strengthening the pipeline of technical skills Skills development underpins both remanufacturing and local component and vehicle-body production. RMI data indicates that the number of qualified artisans in key trades, including machinists, declined by as much as 8.3% between 2019 and 2023. Reversing this trend will require sustained investment in apprenticeship opportunities, technical training, trade testing and workplace development. Industry is already taking steps to address these gaps. The new Automotive Machinist Occupational Trade Qualification has been developed through collaboration involving RMI Training, ARA, the National Artisan Moderation Body (NAMB), the Quality Council for Trades and Occupations (QCTO), merSETA and industry experts. A pilot is being undertaken at Golden Arrow's Western Cape facilities. ARA and RMI Training are also working with Indlela, under the Department of Higher Education and Training (DHET), to re-establish machinist trade-testing capacity. In parallel, a Diesel Fuel Injection Technician apprenticeship is being revived in collaboration with Bosch SA, merSETA, QCTO and NAMB, while SAVABA is working to strengthen the skills pipeline for vehicle bodybuilders. Through its merSETA-funded short skills programme, the RMI also supported more than 1,500 learners across five regions in 2025. "These initiatives demonstrate that industry is prepared to invest its expertise, workplaces and technical knowledge in developing the next generation of artisans," says Ferreira. "The challenge is ensuring that there are sufficient funded apprenticeship places, accredited trade-testing facilities and qualified assessors to turn this commitment into a sustainable pipeline of skilled people. A stronger partnership between government and industry can help address these constraints." A practical partnership between government and industry The RMI believes several practical measures could help unlock these opportunities and strengthen the contribution of the commercial vehicle sector to South Africa's industrial and economic development. These include: • Including commercial vehicles in the automotive policy review: Medium, heavy and extra-heavy vehicles should have a defined place in the policy framework, with localisation considered across the vehicle's full economic life rather than only at the point of new vehicle production. • Recognising remanufacturing as manufacturing: Relevant production incentives and standards should support the growth of legitimate remanufacturing businesses, while clearly distinguishing remanufactured components from repaired parts. • Using public fleet procurement to support lifecycle value: Government departments, municipalities and state-owned entities operate substantial truck and bus fleets. Procurement decisions that consider durability, warranty, repairability, turnaround times, downtime and compliance alongside purchase price and local economic contribution could help support competitive local suppliers. • Funding the full artisan development pathway: Closer collaboration between government and established industry structures could expand apprenticeship placements, technical training, assessment, trade testing and continuing professional development for heavy vehicle and related specialist trades. • Applying equivalent standards to imported and locally manufactured components: Consistent safety and technical requirements would support consumer and fleet confidence while promoting fair competition. • Supporting existing local body, trailer and specialised vehicle manufacturing: Trade and procurement decisions should take account of South Africa's existing manufacturing capability where local businesses can deliver products to the required specification and standards. "These are practical opportunities for government and industry to work together. They are about making better use of existing capability, improving the conditions for investment and ensuring that localisation is commercially viable over the long term," Ferreira says. "The opportunity is to bring government and industry together around a practical programme that helps these businesses grow, develops the skills they need and strengthens South Africa's commercial vehicle and transport ecosystem. That is how localisation can deliver lasting economic value," Ferreira concludes. ENDS Media contact : Jacqui Moloi / jacqui@findleypr.co.za / 0717648233

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