In line with its automotive sector roadmap unveiled in 2023, South Africa has launched incentive policies to boost local production. The National Treasury plans to invest 1 billion rand (approximately $54.5 million) to support the automotive industry.

This fund will be used to promote local production of vehicles and clean energy batteries, as well as the manufacturing of spare parts.

The initiative is part of the measures adopted by South African authorities, who announced in 2024 a 150% tax deduction for investments by electric and hydrogen vehicle manufacturers. This policy aims to implement the Green Mobility White Paper published by the country in 2023, which outlines its strategy to shift part of the national vehicle fleet to electric engines by 2035.

The Rainbow Nation aims to strengthen its position in the African and global automotive industry, which is undergoing major changes due to decarbonization goals. South Africa produces over 500,000 vehicles per year and hosts major brands such as Toyota, Ford, Isuzu, Volkswagen, and Mercedes, among others.

Data from 2024 shows that the sector contributed over 400 billion rands to South Africa’s total exports in 2023, accounting for nearly 5% of the national GDP. However, although the country is one of Africa’s key automotive hubs, more than 70% of its production is exported outside the continent, especially to Europe.

Source of the article: ecomnewsafrique