Keynote address by Deputy President Shipokosa Paulus Mashatile at the occasion of the National Association of Automotive Component and Allied Manufacturers, Eastern Cape, Nelson Mandela Bay, Broadwalk ICC
Programme Director;
Premier of the Eastern Cape, Oscar Mabuyane;
Minister of Small Business Development, Stella Ndabeni;
Nelson Mandela Bay Metropolitan Municipality, Executive Mayor, Councillor Babalwa Lobishe;
NAACAM President, Ugo Frigerio;
NAACAM Vice Presidents, Andrea Moz, Arthur Mtombeni and Jacques Rikhotso;
NAACAM CEO, Renai Moothilal;
NUMSA General Secretary, Irvin Jim;
AIDC-EC board chairperson, Phumzile Zitumane;
AIDC-EC CEO, Thabo Shenxane;
Naamsa president, Billy Tom;
AITF CEO, Jabulani Selumane,
Ladies and Gentlemen,
We are meeting here today in the month that we remember and honour the sacrifices that the women of South Africa have made over the past 70 years, materialising most significantly through the march of 1956, which changed the political landscape of apartheid South Africa.
Yesterday, I had the opportunity to address the first P20 Women's Parliament of the seventh administration, an important event for Parliament, but also for the global women’s movement in the year that South Africa chairs the G20 Presidency. Women, youth, and other marginalised groups must not be left behind in the transformation process of the sector, and this must be a goal that NAACAM is committed to, in line with the country’s overall transformation agenda.
South Africa’s Presidency of the G20 is a significant moment for the continent and the global south, and through its theme of Solidarity, Equality, Sustainability, also seeks to contribute to the automotive sector by putting on the table relevant discussions that pertain to economic resilience and growth, sustainability and the green transition, and global governance reform among other things.
I specifically make mention of this because it is important that, as a sector, you are also positioned to enhance the discussion at that level, considering that this is a global industry.
Ladies and Gentlemen,
This session takes place at a time when South Africa’s automotive and manufacturing industries are navigating tough times, just as our economy was starting to show signs of recovery.
This extraordinary time necessitates collaboration between the government and the private sector to address the growing dependence on imports, infrastructural inadequacies, the transition to electric vehicles (EVs), and the issue of a 30 per cent tariff increase.
I am pleased that the National Association of Automotive Component and Allied Manufacturers (NAACAM), the foremost representative of South Africa’s automotive component industry, has convened us at this opportune moment to delineate the path forward for our nation.
To that extent, it is admirable that NAACAM invests a lot of resources in improving the localisation, transformation, and supplier development landscape in South Africa.
This comes with the appreciation that the automotive industry holds significant potential for shared prosperity through targeted industrial development.
This sector is a success story of industrial policy and contributes significantly to the GDP and employment. The automotive sector in South Africa is one of the country's most strategically important and internationally linked industries, accounting for 22.6% of manufacturing output and 5.2% of the country's GDP.
Of great significance in our fight to increase employment is the automotive sector, which employs approximately 115,000 people in total. The largest share of these employees, over 80,000, work in the component sector.
The industry is export-oriented, globally competitive, and plays a vital role in regional and national industrial development. In 2024, the component sector exported R62.5 billion of components.
We must never allow the loss of these gains because of external and internal pressures. I say this with concern because the employment levels in the sector have been under strain due to ongoing economic pressures and reduced production volumes.
I have also learnt that over the past two years, NAACAM has recorded twelve company closures, impacting over 4,000 individuals. What is of more concern are the recently released figures by Statistics South Africa showing that the country’s unemployment rate has climbed to 33.2% in the second quarter of 2025, an increase from 32.9% in the previous quarter.
This latest figure is a clear indication that the nation's unemployment crisis remains an urgent concern. We need to do more to combat unemployment, which might include improving education and skills to match labour market demands, promoting entrepreneurship and small enterprises, and investing in public employment programs to generate jobs.
The government is committed to working with various sectors to create employment and improve the living conditions of our people. The government supports the automotive industry through a combination of investment incentives, improved policy frameworks, and infrastructure development.
Key initiatives include the Automotive Investment Scheme (AIS), which offers non-taxable cash grants to encourage investment in new models and components.
Additionally, the government supports local production through tariffs and incentives, aiming to boost employment and strengthen the automotive value chain.
The Automotive Industry Development Centre (AIDC) also plays a crucial role in skills development, enterprise development, and managing incentive programmes. This sector is also guided by the South African Automotive Masterplan 2035, which aims to build a globally competitive and transformed industry.
The Automotive Masterplan 2035 goals include growing vehicle production to 1% of global output (1.4 million vehicles), increasing local content to 60%, doubling employment to 224,000 employees, and deepening transformation and value addition, with 25% Black-owned involvement at the Tier 2 and Tier 3 component manufacturer level.
The Automotive Production Development Programme Phase 2 is the policy programme intended to support and enable the realisation of the objectives of the Masterplan.
As the government, we recognise the industry's significant role and see it as the backbone of our economic growth, promoting industrial development and encouraging innovation.
I am of the view that by increasing investment in research and development, we can use the power of technology to improve efficiency and sustainability, ensuring that our products and services stay competitive in the global market.
Moreover, by nurturing a culture of collaboration and partnership among manufacturers, suppliers, and stakeholders, we can unlock new opportunities for growth and prosperity.
This sector, not just in South Africa but in Africa as a whole, has emerged as a critical area of investment, providing substantial prospects for growth and development.
In this context, we must not overlook the significance of the African Continental Free Trade Area (AfCFTA) agreement on economic integration and industrialisation, which is projected to draw additional international investment into the African automotive industry.
Moreover, the Free Trade Agreement has the potential to significantly boost the automotive industry across the continent by reducing trade barriers, fostering regional value chains, and harmonising regulations. This could lead to increased production, lower costs for consumers, and a more competitive market.
The implementation of this Agreement has the potential to lessen African countries' dependency on developing countries for automotive components and completed vehicles by promoting regional value chains and increasing local production.
Creating a single continental market for goods and services could potentially lead to increased trade, investment, and job creation within Africa.
However, this does not suggest that we do not need other nations as trading partners. We believe in diversifying our investments and engaging in trade with several partners. It is for this reason that the Cabinet has adopted a new trade proposal to the United States that aims not just to settle the 30 per cent tariff but also has ramifications for over 130 other trading partners who may reroute products into the South African market. As the Cabinet, we are committed to protecting the economic interests of our country and are forging ahead toward strengthening our economy, therefore, dealing with the triple challenges of unemployment, poverty, and inequality.
Ladies and gentlemen,
I must highlight that there will be repercussions felt throughout the entire value chain if we do not reach an amicable trade agreement with the White House.
It is probable that South African suppliers who provide support to domestic original equipment manufacturers (OEMs) that export automobiles or integrated systems to the United States would experience volume cutbacks. This will put pressure on production planning, employment decisions, and investment choices.
South African automobiles and components would see a direct rise in the landed cost in the US market. Because of this, they would be unable to compete with goods from nations that have continued preferential or zero-duty access, such as those in the USMCA (United States, Mexico, Canada Agreement).
Overall, the imposed tariffs threaten to disrupt well-established trade flows and weaken the global competitiveness of South Africa’s automotive manufacturing ecosystem.
However, South Africa remains resilient and steadfast in its efforts to grow and protect our economy. We will continue engaging with the USA to identify practical solutions.
Ladies and Gentlemen,
Despite challenging global and domestic economic circumstances, the automotive component sector continues to reaffirm its commitment to South Africa, attracting significant investment and driving innovation, thereby strengthening South Africa’s manufacturing capabilities and global competitiveness.
The recent investments in the Eastern Cape by Shatterprufe, a part of PG Group, and Ebor Automotive Systems demonstrate that the South African market is resilient and capable of overcoming any setback.
Ebor Automotive Systems is a locally owned, Tier 1 producer of plastic injection-moulded components and assemblies, with facilities in Nelson Mandela Bay and East London. Ebor is a B-BBEE Level 4 company with an Employee Share Ownership Program (ESOP) benefiting over 200 employees.
Compatriots, some of the future opportunities in this sector that we must take advantage of are localisation and transformation.
On localisation – We can increase localisation with existing and potential new original equipment manufacturer (OEM) entrants to market, achieving a 5% growth in SA localisation rate, potentially resulting in R30bn in new local procurement.
Moreover, research has indicated that South Africa is well positioned to localise high-value New Energy Vehicle (NEV) components, including fuel cells, thermal management systems, e-axle and high-voltage battery mineral beneficiation and assembly.
Regarding transformation, we can intensify the sector's potential to create at least 130 new Black industrialists in component manufacturing as part of the Automotive Masterplan 2035 goals.
At the heart of our vision for the automotive industry is a commitment to shared prosperity. We believe that sustainable development must benefit all members of society, empowering individuals and communities to thrive and succeed.
Our country boasts a rich history of automotive innovation and a skilled workforce that is capable of competing on a global scale.
As we look towards the future, we must capitalise on this potential to drive economic growth and create opportunities for all South Africans.
Through creating inclusive business models and fostering a supportive environment for entrepreneurship, we can ensure that the benefits of industrial growth are shared equitably among all South Africans.
As we navigate the challenges and opportunities that lie ahead, let us remember that our strength lies in our unity and collective vision for a brighter future.
Together, we can build a future where prosperity is shared by all, leaving behind a legacy of growth and opportunity for generations to come.
I Thank You.
#GovZAUpdates
