South Africa is overhauling its automotive policy by phasing out government support for semi knocked-down vehicle assembly facilities that rely heavily on imported component kits.
Speaking on Thursday at the annual South African Auto Week, Trade, Industry and Competition Minister Parks Tau revealed the sweeping regulatory shift.
The policy change targets operations importing near-complete vehicle bodies. Officials want to eliminate loopholes and drive deeper local industrialization through true complete knocked-down production.
Existing facilities will experience a gradual phase-out of incentives. Meanwhile, prospective automotive manufacturing projects relying on kit-assembly models will receive zero policy backing.
“We must transition away from superficial assembly toward genuine domestic value addition across our automotive value chains,” Tau emphasized during the industry gathering.
This directive follows long-standing complaints from local automakers regarding unfair competition. Furthermore, Tau announced a formal competitiveness inquiry into the light commercial vehicle sector.
Automotive manufacturing remains a core pillar of South Africa’s industrial economy, contributing billions to exports and employing thousands of workers nationwide.
