By Busi Mavuso, CEO of Business Leadership South Africa (BLSA), has hailed the domestic automotive industry as an “unsung hero” of the South African economy. Mavuso made these comments after attending the 2024 South African Auto Week, hosted by naamsa | The Automotive Business Council in Cape Town from October 15 to 18. Her praise highlighted the pivotal role the industry plays in both the economy and the country’s transition to cleaner technologies.
The Automotive Industry’s Role in South Africa’s Economy
Mavuso was vocal about the importance of the automotive sector in driving South Africa’s economic growth. In her weekly newsletter on October 21, she lauded the industry’s forward-thinking approach, particularly as it prepares for a cleaner, more sustainable future.
Key figures shared during the event emphasize the importance of the sector:
- The automotive industry accounts for 15% of South Africa’s total exports.
- It directly employs 116,000 people in vehicle and component manufacturing.
These numbers underscore the industry’s vital contribution to the country’s economic health, making it a cornerstone of South Africa’s export sector and a significant source of employment.
Transitioning to Cleaner Fuels: A Necessary Shift
One of the major themes of South African Auto Week was the industry’s move toward cleaner fuels, including electric vehicles (EVs). With the EU’s Carbon Border Adjustment Mechanism set to impose tariffs on imports with large carbon footprints, there is growing urgency for South African automakers to reduce their environmental impact.
- Government support: The presence of President Cyril Ramaphosa and various ministers, such as Trade, Industry and Competition Minister Parks Tau, reflected the government’s commitment to ensuring the automotive industry’s competitiveness in this new landscape.
- Cleaner energy: Mavuso highlighted the importance of transitioning to cleaner fuels, noting that efforts are already underway to align the industry with global sustainability standards.
This transition is seen as critical for maintaining South Africa’s trade relationships, particularly with the EU, one of the country’s largest export markets for vehicles.
A Legacy of Innovation and Political Support
The automotive industry in South Africa has a long history of innovation. It has been 100 years since the first Model T Ford rolled off the production line in Port Elizabeth, marking the beginning of vehicle manufacturing in the country. Since then, the sector has continued to grow and adapt, positioning itself as a key player in the global automotive landscape.
Mavuso commended the strong political support shown for the industry during the Auto Week event. President Ramaphosa’s presence, alongside other high-level government figures, instilled confidence in the sector’s future. The government’s backing is seen as crucial for fostering a competitive and growing automotive industry.
- Political backing: Mavuso noted that the involvement of key ministers in discussions about the future of the automotive industry signals a robust political will to ensure the sector remains competitive.
- Future outlook: Conversations during the event indicated that the government is actively looking for ways to support the industry in its transition to cleaner technologies and in enhancing its competitiveness on a global scale.
With these developments, the automotive industry in South Africa is poised to continue playing a significant role in the nation’s economy, while also taking bold steps toward a greener, more sustainable future.