AS the United States prepares to withdraw South Africa’s preferential trade access under the African Growth and Opportunity Act (Agoa) from January 2027, the Retail Motor Industry Organisation (RMI) has called for an urgent pivot toward a more resilient, full-lifecycle domestic automotive manufacturing base.
The impending Agoa withdrawal has added pressure to a sector already navigating rising global competition and higher trade barriers. It also underscores a sharp localisation gap: While the South African Automotive Masterplan (Saam) 2035 targeted 48.2% local content by 2025, actual local content stalled at 39%, barely moving from the 38.7% recorded in 2015.
Henk Ferreira, acting chief executive of the RMI, argues that the sector must look beyond new vehicle assembly to survive and thrive. “International trade developments underline how important it is that we build a stronger domestic manufacturing base.
“While we cannot control trade policies in other markets, we can do more to strengthen local capability, support businesses already operating in the sector and retain more economic value within South Africa,” Ferreira said.
He further said: “Localisation should not be viewed only through the lens of new vehicle assembly. There are significant opportunities across the full vehicle lifecycle, including component manufacturing, remanufacturing, commercial vehicle body and trailer manufacturing, maintenance, repair and the development of specialised technical skills.”
The commercial vehicle sector offers a prime testing ground for this strategy. According to Naamsa’s September 2026 data, 25 139 medium, heavy, and extra-heavy trucks and buses were sold in the first nine months of 2026, an 8.5% year-on-year increase.
However, because these sales are spread across numerous platforms, localising major components like engines and cabs is impractical. “The opportunity is to build on what South Africa already has, rather than assume that localisation must begin with establishing entirely new manufacturing operations,” Ferreira noted.
Instead, the focus should be on remanufacturing high-value components like turbochargers, cylinder heads, and diesel fuel injection systems, an area championed by the Automotive Remanufacturers’ Association (ARA).
Ferreira explained: “Commercial vehicles have long working lives, and significant value is created well beyond the point of initial manufacture. There is scope to retain more of that value locally through remanufacturing, component production, maintenance, repair and the development of specialised technical skills. With the right enabling environment, these activities can support jobs, small businesses, road safety and the resilience of our transport and logistics sector.”
He highlights the core benefit of this approach: “Remanufacturing retains the engineering and material value already embodied in a component while adding local machining, testing, specialist labour and technical expertise.”
To scale this, policy must adapt. “Recognising remanufacturing as a form of manufacturing within relevant policy and incentive frameworks would also help create a more supportive environment for local businesses investing in these activities,” he noted.
Another growth area lies in commercial vehicle bodies and specialised applications. Members of the South African Vehicle and Bodybuilders’ Association (Savaba) already produce tankers, tippers, and armoured vehicles to national standards. Savaba is currently engaging the dtic and Itac regarding the impact of ready-built imports.
“We believe that where local manufacturers have the technical capability, certification and capacity to produce a vehicle or body to the required specification, this existing capability should be properly considered in trade and procurement decisions,” Ferreira said.
A Localisation Support Fund EY study valued the automotive aftermarket at R106 billion in 2025, identifying batteries, glass, and brake friction products as key localisation targets.
“Localisation must be commercially sustainable. The objective is not simply to manufacture a product locally, but to create businesses that can compete on quality, price, reliability and performance,” Ferreira said. “Where local manufacturers can meet the required standards and compete effectively, we need to create the conditions for them to grow. This includes ensuring that imported products meet equivalent safety and technical requirements.”
Underpinning these ambitions is a critical need for technical skills. RMI data reveals that qualified artisans in key trades dropped by 8.3% between 2019 and 2023.
Industry is responding: A new Automotive Machinist Occupational Trade Qualification is piloting at Golden Arrow, a Diesel Fuel Injection Technician apprenticeship is being revived with Bosch SA, and the RMI supported over 1 500 learners across five regions in 2025.
“These initiatives demonstrate that industry is prepared to invest its expertise, workplaces and technical knowledge in developing the next generation of artisans,” Ferreira said.
However, he cautioned: “The challenge is ensuring that there are sufficient funded apprenticeship places, accredited trade-testing facilities and qualified assessors to turn this commitment into a sustainable pipeline of skilled people. A stronger partnership between government and industry can help address these constraints.”
To unlock this potential, the RMI proposes a practical partnership focused on six key measures: integrating commercial vehicles into the automotive policy review across their full economic life; officially recognising remanufacturing as manufacturing; leveraging public fleet procurement to prioritise lifecycle value and local economic contribution; fully funding the artisan development pathway; applying equivalent safety standards to imports; and supporting existing local body and trailer manufacturers in trade decisions.
“These are practical opportunities for government and industry to work together. They are about making better use of existing capability, improving the conditions for investment and ensuring that localisation is commercially viable over the long term,” Ferreira said.
He further said: “The opportunity is to bring government and industry together around a practical programme that helps these businesses grow, develops the skills they need and strengthens South Africa’s commercial vehicle and transport ecosystem. That is how localisation can deliver lasting economic value.”
