From Challenges To Change: Vital Factors Driving The RSA Auto Industry Forward In 2025 And Beyond
The South African auto industry has always been a cornerstone of the Mzansi economy, balancing global trade pressures with local innovation. As 2025 unfolds, the industry finds itself at a crossroads.
Production dipped slightly in 2024, but South Africa still stands tall as the number one vehicle producer on the continent, ahead of Morocco. Behind the headlines of plant closures and trade tensions lies a story of opportunity, new investment, and consumer wins that could reshape the market for years to come.
South Africa Holds Its Ground
In 2024, South Africa produced 599,755 vehicles. This figure represents a 5% year-on-year decline, yet it kept the country ranked 20th in the world and the top spot in Africa. Morocco followed close behind with 559,645 units, up 5% on the previous year. Together, these two countries make up over 90% of Africa’s total vehicle production.
Quarterly trends reveal the pressures more clearly. In Q4 2024, domestic vehicle production dipped 9% compared with the same quarter in 2023, while exports slipped almost 10% over the same period, according to Naamsa. Still, the long view shows resilience. In 2023, South Africa hit an all-time production high of 633,337 units, up from 555,889 in 2022, proving the sector’s ability to bounce back even after periods of strain.
While the numbers fell short of the ambitious 784,509-unit target set under the South African Automotive Masterplan 2035, the bigger picture is still one of resilience. For over seven decades, global brands like Volkswagen, Toyota, BMW, and Isuzu have invested in local manufacturing, creating thousands of jobs and keeping supply chains alive. Even as tariffs and shifting consumer demand place pressure on exports, South Africa remains a global player in auto production.
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Turning Pressure Into Possibility
Yes, the industry faces headwinds. Exports to the United States took a knock after new tariffs disrupted access under the African Growth and Opportunity Act (AGOA). Locally, sales slowed by 3% in 2024 to 515,712 units, the lowest since the pandemic. But each challenge has sparked an equally pivotal response.
- Rising Chinese imports have added pressure on local manufacturers, but for South African buyers this has meant more choice, new models, and sharper price competition.
- The dip in local demand has pushed dealerships to become more consumer-centric, offering tailored deals, improved financing, and stronger after-sales service.
- Hybrid and EV technology, once seen as futuristic, is now firmly on the horizon, with BYD, Toyota, and other brands investing in electrification for local markets.
For the South African car buyer, this transition could translate into real benefits: wider variety, more affordable options, and better long-term support.
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Local Production Creates Local Wins
Despite a few plant closures and over 4,000 job losses in the past two years, there are bright spots. Isuzu recently expanded operations with a focus on building trucks in South Africa for African markets, securing hundreds of jobs in the process. Toyota, too, has doubled down on investment in hybrid technology, ensuring South Africa remains on track for the Masterplan 2035 goals.
At the same time, there’s still work to be done. Current local content levels stand at around 39%, well below the 60% target set for 2035. Boosting local content will be key to safeguarding jobs, strengthening the parts supply chain, and reducing reliance on imports. The upside is that this gap represents opportunity: as global brands commit to deeper localisation, South African suppliers stand to benefit from more contracts, more skills development, and more secure long-term growth.
Every time a global automaker commits to local production, it strengthens the broader economy. Jobs are created not just on the factory floor, but across supply chains, from component suppliers in KwaZulu-Natal to logistics partners in Gauteng. These investments also help raise local content levels, moving South Africa closer to its target of 60% by 2035.
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Global Brands Drive Local Competition
The South African auto landscape is shifting rapidly as new entrants challenge traditional leaders. Chinese brands like Chery, Haval, and BYD are carving out space with competitive pricing, cutting-edge features, and strong warranty offerings. Indian manufacturers such as Tata are also expanding their footprint.
For consumers, this wave of competition is a win. Dealerships are fighting harder for attention, which means sharper specials, better trade-in values, and an unprecedented variety of vehicles to choose from. Whether buyers are eyeing a pre-owned family hatchback or a brand-new SUV, the range has never been broader.
The Road To Electrification
Globally, EV adoption is accelerating, and South Africa is gradually becoming part of this journey. While EV infrastructure such as charging stations is still limited, momentum is building. BYD has launched its range locally, and Toyota is piloting hybrid models that could bridge the gap for buyers who want to reduce fuel costs without committing fully to electric.
The Masterplan 2035 includes incentives to encourage local EV production, which could transform South Africa into a regional hub for greener motoring. For consumers, this means access to future-focused vehicles while supporting sustainable industry growth.
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SUMMARY: Consumer Gains In A Shifting Market
In short, when the industry changes, consumers often benefit most. Here’s how the current shifts could work in SA motorists’ favour:
- Pricing opportunities. With imports increasing and dealerships competing harder, buyers may find better deals in both new and pre-owned markets.
- Variety of models. More global brands entering the local market mean greater choice across sedans, SUVs, and bakkies.
- Stronger after-sales support. Local production ensures parts availability and more robust warranty coverage.
- Future-ready options. Access to hybrids and EVs means buyers can start considering greener motoring without waiting decades.
A Major Turning Point For SA Motorists
Every major industry faces moments of challenge that become turning points. For South Africa’s auto sector, 2024 may be remembered as the year that sparked a new era of competitiveness, innovation, and opportunity.
Group1 Cars stands ready to guide buyers through this evolving landscape. Whether it’s exploring the latest arrivals from global brands, considering a tried-and-trusted favourite, or shopping for a quality pre-owned model, South Africans have plenty to look forward to. Check back soon on the Group1 Cars blog for more up-to-date insights on South Africa’s auto industry, as well as tips for finding the best deals in the pre-owned market.
