Asia’s auto giants to invest in South Africa’s revival amid Morocco’s dominance

South Africa’s auto industry has secured a significant boost as Chinese and Indian car companies pledged to upgrade their operations from semi-knocked-down (SKD) assembly to full-scale manufacturing, Trade Minister Parks Tau announced on Thursday, October 2.

• South Africa secures pledges from Chinese and Indian automakers to upgrade assembly plants to full-scale manufacturing.
• Trade Minister Parks Tau says the move will strengthen South Africa’s industrial base and position it as a continental hub.
• Toyota and Ford warn of declining CKD volumes, import surges, and Morocco’s growing competition in the automotive export market.
• BAIC and Mahindra lead new commitments, with feasibility studies underway for full-scale plants.

The move comes as auto leaders warn of an urgent need to shield the country’s manufacturing base from the rising tide of imports and the rapid shift to electric vehicles.

“In both those markets, the companies that currently have SKD operations in South Africa have committed to transition to CKD (complete knocked down),” Tau told delegates at an industry conference.

He emphasised that the government would back these companies in building full production capacity, strengthening South Africa’s industrial base, and positioning it as a continental hub.

Chinese automaker Beijing Auto Industrial Corporation (BAIC), which assembles its Beijing X55 model in Gqeberha, and India’s Mahindra, which produces pick-up trucks in Durban, are at the centre of this commitment.

Mahindra has already initiated a feasibility study with South Africa’s Industrial Development Corporation to establish a full-scale plant.

Ford raises alarm: Morocco could overtake South Africa

Industry leaders say this shift is vital. Toyota South Africa CEO Andrew Kirby revealed that CKD vehicle sales had dropped from 56% to just 33% over the last 19 years.

“What this means is that we are flooding the market with imports. Sustaining CKD volumes is critical to preserving the domestic auto industry, local value creation, and economic benefits,” he said.

The stakes are high, and South Africa has been the continent’s leading vehicle producer for a century. But Ford Africa president Neale Hill issued a stark warning: “We are facing the risk of losing this position as the top dog on the continent (to Morocco) as early as this year.”

Analysts note that Morocco has aggressively expanded its auto exports to Europe, while South Africa struggles with tariff uncertainties and an expensive EV transition.

Tau said further talks with investors in Asia had generated interest in either using South Africa’s excess manufacturing capacity or establishing new factories.

With Africa’s young population and rising demand for affordable vehicles, many see South Africa’s manufacturing revival as key to its economic future.

But without stronger protection against imports and faster investment in EV-ready infrastructure, industry leaders fear the country could slide into de-industrialisation.

As Tau put it, “We must ensure South Africa not only maintains its position but becomes the automotive manufacturing hub for Africa.”