Automotive Industries

The National Association of Automobile Manufacturers of South Africa (NAAMSA) serves as the industry mouthpiece of the country. NAAMSA has been an active associate in the institutionalisation of ITS in South Africa since the initial ITS awareness seminar in 1997.

The country’s automotive industry is generally considered as vibrant. Total automotive sales in 2005 were estimated at 565,000 units, which brought the year-on-year growth rate to 25%. Business Monitor International (BMI) forecasts a slowdown in sales growth to 8% in 2006. However, based on domestic demand and export sales trends, as well as investment growth in the automotive sector, BMI forecasts that output will rise by 75% between 2005 and 2010, reaching 928,800 units.

The automotive production facilities in South Africa cater for right-hand drive (RHD) vehicles that enable manufacturers to export to other RHD countries. Other strengths of the local industry are the strong geographic position for access to the rest of the region and the South African economy that dominates sub-Saharan Africa. A Motor Industry Development Plan (MIDP) provides incentives from which exporters benefit.

This sector is relatively small in relation to the overall economy, contributing about 4% of the GDP. The fact that South Africa is far removed from the large mass markets of Europe and North America, as well as pressures on the automotive industry from unions to meet demands, are two of the weaknesses the sector faces.The industry sees important opportunities in the expansion of MIDP to 2012 and possible access to the Eurozone through talks with the EU. The abolishment of regional tariffs considered by the South African Development Community is another development that would contribute to local industry growth.