The Polo is South Africa's most prolifically produced vehicle at the moment.
Image: IOL
A Home Market Slipping Away From Local Factories
The numbers on the showroom floor tell an uncomfortable story. New vehicle sales climbed 15.7% to 597,338 units in 2025, and the first half of 2026 kept accelerating, up 12.9% year-on-year to more than 315,000 units, with June posting its best result in 19 years. Ordinarily, that would be unambiguous good news. Instead, as component manufacturer Metair has warned, most of that growth is being captured by imported metal rather than local production. Suzuki, importing every unit from India, is now South Africa's second best-selling brand. Chery alone moved over 6,000 units in just the first four months of 2026, with GWM, BYD, MG, Geely and GAC all chasing the same momentum. The Industrial Development Corporation has calculated that Chinese imports helped drive a R140 billion trade deficit with China in the first nine months of 2025 alone, while India, chiefly through Suzuki and Mahindra, is an even larger source of the imbalance. Imports now account for roughly two-thirds of new car sales in South Africa, an extraordinary reversal for a country that still manufactures vehicles for BMW, Mercedes-Benz, Volkswagen, Toyota, Ford and Isuzu.
Nissan's Rosslyn plant is the clearest casualty so far. Financial difficulties forced Nissan to sell the factory to Chery earlier this year; it is now being retooled to build Chery Group vehicles from 2027, a symbolic handover of South African production capacity from a legacy Japanese brand to a rising Chinese one.
The Thailand-Versus-Australia Choice
South Africa's predicament has a useful historical parallel, and it comes with two very different endings. Thailand, dubbed the "Detroit of Asia," faced the same import pressure decades ago and responded with sustained local-content rules, tax incentives tied to domestic production, and export-oriented industrial policy, it now assembles roughly two million vehicles annually and anchors Southeast Asia's auto supply chain. Australia took the opposite path. Unable to compete with cheaper imports and unwilling to keep subsidising local plants indefinitely, Canberra let protection lapse; Ford, Holden and Toyota all shut their Australian factories between 2016 and 2017, ending a century of local car manufacturing entirely. South Africa's Automotive Production Development Programme (APDP2) is, in effect, a bet on the Thai model over the Australian one, naamsa argues that every rand of APDP support generates nearly R4 in domestic manufacturing value and almost R8 in export earnings, having underpinned R137 billion in local value-addition in 2025. Critics, including some manufacturers themselves, say government has been slow to review the programme and is failing to keep pace with how aggressively Beijing and New Delhi are backing their own exporters.
Why the Factories Still Matter
It would be easy to read all this as inevitable managed decline, but the underlying industrial base remains formidable. South Africa's six OEM plants, Ford and BMW in Pretoria, Volkswagen in Kariega, Isuzu in Gqeberha, Mercedes-Benz in East London and Toyota in Durban, collectively sustain more than 115,000 direct jobs, with Volkswagen's Kariega plant alone accounting for 3,900 of them while remaining the only factory left in the world still building the Polo. The sector contributes 5.2% of GDP and represents 23.8% of all domestic manufacturing value-add, the largest of any manufacturing category in the country. Crucially, 70.5% of local light-vehicle production is exported, chiefly to Europe under longstanding EU and UK free trade agreements worth R182.8 billion in 2025.
The real risk is not that South Africa stops making cars tomorrow, it is a slow bleed, where export strength on the manufacturing side masks a shrinking share of the domestic market, component import costs keep climbing (R151 billion in original-equipment parts in 2025 alone), and each year without APDP reform makes it marginally easier for the next OEM to do what Nissan did. The African Continental Free Trade Area's new automotive rules of origin, adopted in February 2026, offer a genuine opportunity to pivot exports toward the rest of the continent rather than relying solely on Europe. Whether South Africa becomes this decade's Thailand or its Australia will likely be decided less on the factory floor than in how fast policymakers move.
Written by:
*Dr Iqbal Survé
Past chairman of the BRICS Business Council and co-chairman of the BRICS Media Forum and the BRNN
*Sesona Mdlokovana
Associate at BRICS+ Consulting Group
Africa Specialist
**The Views expressed do not necessarily reflect the views of Independent Media or IOL.
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