Government wants manufacturers to build more of their vehicles locally as it reviews support for the automotive industry.

South Africa plans to phase out existing semi-knocked-down (SKD) vehicle assembly operations and stop providing policy support for new facilities of this kind.

Trade, Industry and Competition Minister Parks Tau announced the move at South African Auto Week in Durban on Thursday, 15 October.

SKD assembly involves importing partially assembled vehicles or major components for completion at a local plant. Government’s proposed shift aims to encourage deeper manufacturing and greater sourcing from South African suppliers.

The announcement forms part of a review of the Automotive Production and Development Programme, involving government, industry organisations and organised labour.

South Africa’s automotive master plan targets an increase in local content from an average of 38% to 60%, alongside higher employment and a larger share of global vehicle production by 2035. Tau said medium and heavy commercial vehicles would be excluded from the change.

For readers, the distinction matters: assembling an imported kit locally can involve a different level of domestic production from manufacturing that draws extensively on local components and suppliers.

The next details to watch are the transition timetable and the requirements manufacturers will need to meet. The announcement alone does not establish how showroom prices will change.

Sources: Department of Trade, Industry and Competition; SAnews; Reuters.

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