Driving Growth: South Africa Strengthens Automotive Sector Through North African Partnerships Image Credit: GroundUp
Automotive Sector: South Africa Partners with Algeria and Egypt to Strengthen Manufacturing
(The Post News) – The automotive sector is a cornerstone of South Africa’s economy, and the government is taking bold steps to protect and grow it. Minister of Trade, Industry and Competition, Parks Tau, has led a 30-business delegation to Algeria for the fourth Intra-African Trade Fair, seeking to build stronger partnerships with Algeria and Egypt. These talks are aimed at revitalizing the automotive sector, which has been facing significant headwinds from cheap imports, rising tariffs, and job cuts.
“We’re also reaching out to other automotive manufacturing countries, but we thought it’s important that we start there. And that would include cooperating on areas where we would be able to build component manufacturing capabilities in Algeria, we would be able to consolidate. And the extent to which we create production that is able to access the African market, but also the export market,” Tau said.
This new push comes after last year’s state visit to Algeria, where both countries signed multiple economic cooperation agreements. Tau emphasized that partnerships with North African economic powerhouses are critical to South Africa’s vision of a resilient automotive sector.
South Africa’s objective is clear: boost local manufacturing and reduce dependency on imports. Tau highlighted that the government aims to raise local content in vehicle production from the current 40% average to 65%. “We do intend to ensure that we’re able to increase that level of localisation. Now the problem is that the industry in South Africa and other countries that are auto manufacturers say, Look, if we have a situation where sister countries assemble instead of manufacturing, you make it less competitive for the local industry. It undermines our component sector. So, we need to find agreement on those issues, and that’s what the negotiations are about,” Tau explained.
Automotive Sector Challenges and Opportunities
The automotive sector is currently under pressure due to the influx of cheap imports and tariffs on exports to the US. Job losses have already been felt, and government intervention is crucial to reverse the decline. “Sometimes we tend to compete amongst each other when in fact there are greater opportunities in identifying where we have complementarities and cooperation,” Tau added. “We need to work together to create production that not only serves Africa but also meets international standards for exports.”
Benefits of Strengthening the Automotive Sector
By aligning production capabilities, South Africa, Algeria, and Egypt could create a powerful automotive hub on the continent. This would mean:
- Job Creation: More manufacturing means more employment.
- Reduced Imports: Local production would lower dependency on foreign-made vehicles.
- Export Growth: A strong African supply chain could position the continent as a global competitor.
This collaborative approach aligns with the goals of the African Continental Free Trade Area (AfCFTA), which seeks to create a single market for goods and services across Africa
Future Outlook for Africa’s Automotive Sector
Industry experts believe that the partnerships could transform the automotive sector into a driver of continental industrialization. Internal trade would increase, reducing reliance on Europe and Asia.
To learn more about South Africa’s automotive development policy, visit the Department of Trade, Industry and Competition’s
A United African Automotive Sector
The talks between South Africa, Algeria, and Egypt represent more than just bilateral agreements—they signal the birth of a united African automotive industry. As Tau noted, the goal is to find complementarity rather than competition, and to build production capabilities that meet both local and international demand.
About the Author
