The Automotive Business Council has responded positively to President Cyril Ramaphosa's 2026 State of the Nation Address, praising the government's recognition of the automotive sector as a cornerstone of South Africa's manufacturing economy. However, the industry body emphasises that detailed implementation will be crucial to translating policy promises into tangible investment certainty.
Safeguarding Manufacturing Through Strategic Trade Policy
The council has welcomed government pledges to close tariff loopholes and introduce protective measures for South Africa's manufacturing base. In an increasingly competitive global landscape marked by excess capacity and rising protectionism, the organisation stresses that trade policy must be carefully calibrated whilst remaining consistent with World Trade Organisation requirements.
Tshetlhe Litheko, Chief Policy Officer of naamsa, states that the automotive industry welcomes the clear commitment to protect South Africa's manufacturing base. "Our sector operates in an increasingly competitive global environment, and maintaining domestic production scale is essential to safeguarding jobs, exports and long term investment. Policy coherence, certainty and stability will be decisive in ensuring South Africa remains a preferred production location within global automotive value chains."
Electric Vehicle Investment Incentives Signal Positive Direction
The announcement of a 150 per cent tax deduction for investment in new energy vehicles, coupled with support for local battery production, has been hailed as a strong signal to global manufacturers. However, naamsa emphasises the importance of maintaining a technology neutral approach that recognises battery electric vehicles, plug in hybrids and hybrid technologies as part of a realistic decarbonisation strategy.
Tshetlhe adds that investment decisions for future vehicle platforms are being made now. "Clarity on implementation rules, timelines and incentive structures is critical. A technology-neutral framework, combined with supportive domestic market measures, will significantly enhance South Africa's competitiveness in attracting new model allocations and sustaining export growth."
Infrastructure Improvements Remain Essential
The organisation has praised continued focus on reforming ports, rail and energy systems, noting that the export intensive automotive industry requires significant improvements in freight efficiency and energy reliability to restore South Africa's competitiveness.
The sector's significance is substantial, contributing 5.2 per cent to GDP and accounting for R268.8 billion in exports during 2024. With 115,000 direct manufacturing jobs and 498,000 positions sustained across the formal economy, the industry's call for swift, credible implementation carries considerable weight for South Africa's economic future.
