Address by Minister Nomakhozana Meth at the Naacam Show 2025, hosted in partnership with the AIDC-Eastern Cape, Gqeberha
Programme Director,
My Colleague, Minister Tau
MEC Pieters
Executive Mayor Lobishe,
CEO of NAACAM Mr Renai Moothilal
CEO of AIDC-EC Mr Thabo Shenxane
Leadership of Labour Unions
Distinguished guests,
Leaders from government, industry, and organised labour,
Ladies and gentlemen,
Thank you for the opportunity to address this important gathering. The Eastern Cape is more than just a host for the National Association of Automotive Component and Allied Manufacturers (NAACAM) Show; it is the beating heart of South Africa's automotive sector.
This province is uniquely positioned: it is home to three operating ports, namely, Ngqura, Port Elizabeth, and East London, sitting on the shores of three of the most utilised global shipping routes, with cargo moving from East to West. These ports connect us directly to the Indian Ocean trade, the Atlantic routes, and the global maritime arteries that carry the bulk of world commerce. These strategic assets and others in the Province are important for the trade of various goods and commodities, and present great opportunities for growth and diversification.
In a world of shifting geopolitical tides, such as U.S.–China trade tensions to the realignment of supply chains post-COVID-19, including conflicts in Eastern Europe and the Middle East, South Africa's location could become a premium selling point for manufacturing and export-oriented investment. For every crisis in global politics, there is also an opportunity, and we must capitalize on this wave of change to tap into new frontier markets in Asia, Latin America, and the rest of Africa.
Today our economy — and our workers — are facing extraordinary challenges. These challenges are not of our making, but their consequences are ours to manage. Our task is not only to respond, but to shape a new path that protects jobs, revitalises industries, and equips our people with the skills to compete in a changing global economy.
In the past months, we have witnessed troubling developments: the closure announcements from Volkswagen in Kariega, from Dunlop in Howick, and from other key manufacturers in our automotive value chain. These closures are not just headlines — they represent livelihoods, families, and communities that have depended on these jobs for decades. They also send a warning: without decisive action, our manufacturing base will continue to erode.
Perhaps the most concerning signal came from the steel sector. ArcelorMittal South Africa has confirmed plans to shut its long-steel operations in Newcastle and Vereeniging — the only domestic producers of speciality long steel used in vehicle component manufacturing. These plants do not just supply steel; they supply the backbone of our automotive industry. They produce around 70 kilotons of speciality steel every year, meeting stringent quality and safety standards that imported steel often cannot match without significant cost.
If these closures proceed, we are looking at the loss of more than 3,500 direct jobs in the steel sector, with ripple effects across the automotive supply chain that could easily push the total job losses above 13,000 in the short term. The cost of replacing this local supply with imports would be up to 25% higher, threatening local content requirements under the Automotive Production and Development Programme and risking non-compliance with Rules of Origin in our trade agreements.
The government has not stood by. Through InvestSA, the Industrial Development Corporation has extended a R380 million lifeline to keep these operations running while we work with industry to find sustainable solutions. But we are clear: reactive measures are not enough. We need a Steel Master Plan — anchored in public-private collaboration — that secures a one-year buffer stock, upgrades mini-mills to produce OEM-certified steel locally, and tackles the structural barriers of energy, logistics, and infrastructure that have weakened our competitiveness.
At the same time, we must address the other front in this struggle — the skills front. Industrial competitiveness is not only about machines and inputs; it is about people. In this province, there must be a drive for the concept of Schools of Excellence: specialised centres where young people, artisans, and technicians receive world-class training. These will be linked directly to industry demand — from automotive assembly to steel fabrication, from green technologies to advanced manufacturing. The goal is to create a pipeline of skilled workers who can step into jobs immediately, not years later, and to position our youth not as bystanders to industrial change, but as leaders in it.
We are also aligning our skills agenda with the realities of global trade shifts. The Temporary Employer–Employee Relief Scheme (TERS) is a scheme of the UIF that funds 75% of an employer's basic salary up to the ceiling amount of a maximum of 12 months. It provides support to distressed companies that seek to retain their employees. This is not just a safety net — it is a bridge. A bridge that allows companies to retain their workers through temporary shocks, rather than losing them permanently and dismantling entire production teams.
But we must be clear, TERS is a bridge, not a permanent solution. Relief must be paired with concrete plans for industrial adaptation: retrofitting plants for EV assembly, shifting production to high-demand components, or leveraging AfCFTA to diversify markets. Without adaptation, relief will only delay the inevitable.
Our message is clear: we will not let global headwinds or domestic inefficiencies strip away the gains we have made in industrialisation and job creation. We will protect our industries, modernise our skills base, and ensure that workers are not the collateral damage of economic realignment.
But we cannot do it alone. Industry must work with us — not as reluctant partners, but as co-architects of a resilient future. Labour must remain engaged, not just in bargaining rooms, but in shaping the strategies that keep jobs alive. And communities must see themselves as stakeholders, because when a factory closes, the loss is not confined to the plant — it ripples through every shop, school, and street in that town.
Colleagues, the road ahead is not simple. It will require tough negotiations, smart investments, and — above all — unity of purpose. But history has shown that when South Africa acts decisively, with all partners pulling in the same direction, we can turn crises into opportunities.
Let us commit today to doing exactly that: to safeguarding our industries, to skilling our people, and to standing by our workers — not with words, but with action.
Our economy is feeling the strain. The automotive sector contributes 4.5% to GDP, with several OEMs anchored here in the Eastern Cape and dependent on the very component suppliers gathered in this room. Component suppliers employ about 80,000 people nationwide, making you the largest employment driver in the automotive value chain. The recently published Q2 Labour Force Survey reveals a deepening jobs crisis in the country, with unemployment rising by 0.3 percentage points to 33.2%. Decreases in employment were recorded in manufacturing (5,000 jobs), Finance (24,000), Agriculture (24,000), Utilities (6,000), and Community & social services (42,000).
It would be easy to say the solution is simply to “find new markets," but that is not enough. Diversification must be intentional and strategic. We cannot just send the same product to a different buyer. If the U.S. market shrinks, we must ask:
Can we deepen our penetration of the African Continental Free Trade Area (AfCFTA) with tailored, affordable models for emerging African middle-class markets?
Can we scale up supply to fast-growing Southeast Asian economies where there is demand for both ICE and hybrid vehicles?
Are we prepared to pivot part of our production capacity to the EV components and battery technologies that will be in high demand in Europe, the Middle East, and Asia?
And here is the uncomfortable truth: these opportunities require investment, agility, and policy certainty not just from government, but from industry itself. If we cling to existing business models, we will simply export our decline to new geographies.
The move towards electric vehicles is no longer a distant prospect; it is already reshaping supply chains. Studies indicate that under a 20% EV sales share by 2040, component manufacturing employment could fall by over 18%. Under a 40% EV share, the job losses could double. But localisation of battery production, even at 25% of market demand, could offset much of that loss and even create a net gain in employment.
The state has already allocated R1 billion to kickstart local production of new-energy vehicles and batteries, aiming to attract R30 billion in private investment. From March 2026, 150% first-year tax allowances for EV and hydrogen projects will come into effect. But incentives alone will not ensure success. Industry must decide whether to invest in the skills, tooling, and partnerships to lead in EV manufacturing, or risk being locked out of future value chains.
We also have to strengthen the basics. Inspections under the Occupational Health and Safety Act have found commendable compliance among large firms, but smaller companies often struggle. We are in discussions with the AIDC Eastern Cape to develop targeted support for these smaller enterprises to raise safety standards and improve productivity.
Programme Director, as I conclude, I congratulate both the AIDC Eastern Cape and NAACAM for bringing this event to the heart of the automotive sector. Our geography gives us an enviable starting position. Our skills base and manufacturing heritage give us credibility. But neither geography nor history will secure our future only the choices we make now will.
Government, industry, and labour must share this responsibility. We cannot control global tariffs or the tides of geopolitics, but we can control how we respond by innovating, diversifying, transforming, and investing in the jobs of tomorrow.
If we act with urgency and clarity, the Eastern Cape and South Africa as a whole can be more than a participant in the global automotive industry. We can be a shaper of it.
Thank you.
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