Isuzu CEO Billy Tom moots a shared car plant in SA

The government introduced the latest automotive production and development programme (APDP) in 2021 with the aim of doubling industry production and employment by 2035, but between 2018 and 2024 the local market share of SA-made vehicles declined from 46% to 40%.

Over the same period, imported vehicles from India doubled their market share to 34% while vehicles from China soared 645% to account for 10% of sales today.

With state-owned Chinese car brands enjoying subsidies from their government, it has allowed Chinese companies to offer cars at big discounts compared to legacy brands and disrupt the market.

“We’ve created scale and skills. This is an area of opportunity for the SA auto industry so we’re not a nation of consumers, but producers.”

Tom said he was not looking for protectionism but to level the playing field in a market that has become unfairly skewed, and a shared assembly plant may be an opportunity to boost local manufacturing in an industry that is a major contributor to the economy, accounting for 5.3% of GDP.

There are seven long-standing high-volume car manufacturers in SA that produce vehicles for the local market and export: BMW, Ford, Isuzu, Mercedes-Benz, Nissan, Toyota and Volkswagen.

Stellantis will soon start producing the Peugeot Landtrek bakkie at a new factory in Coega, Eastern Cape, while there are unnamed Chinese brands reportedly interested in setting up local plants. The Chinese BAIC factory in Coega has assembled a handful of cars since its establishment in 2018.

Mahindra this week announced it aims to build a full-scale vehicle factory using local components. After assembling imported SKD vehicle kits near Durban, the Indian brand is conducting a feasibility study to build CKD cars from scratch.

Tom said local car manufacturers also needed to look for more opportunities on the continent.

“Only 15% of what we export is to Africa. We need more bilaterals on the continent, for instance with Egypt, which has become an important hub,” he said.

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