Surge of imports and lack of EV readiness disrupts the automotive industry

Since the start of 2026, many automotive legacy brands have been talking about the disruptions facing the South African motoring industry.

The two key disturbances manufacturers have noted are the number of sales of imported vehicles in the past year and the country’s readiness to adopt new-energy vehicles (NEVs). 

Presenting Toyota South Africa’s manufacturing figures recently, chief-executive Andrew Kirby stressed the importance of having a good balance between imported vehicles and knocked-down vehicles on the country’s roads, while warning against an over-reliance on imports.

“They create a vibrant market that brings in a lot of different styles of vehicles that our customers need. We can’t expect to produce everything in South Africa. That would be an unrealistic expectation but do we have a good balance?” Kirby said at a Toyota state of the motoring industry event.

In 2025, of the 609 000 vehicles produced in South Africa, most of them — 411 000 — were exported. That means that only 32% of vehicles manufactured in the country are sold here. That figure has dropped by more than 20% over the past 20 years.

Vehicle imports from China made up 22% of all vehicle imports into the country in 2024, up 368% from 2020.

Last month, the department of trade, industry and competition warned about possible higher tariffs for imported vehicles, suggesting that South Africa raise the 25% fee to 50%.

Kirby said that while that would boost local vehicle makers, the issue should be dealt with carefully, improving the competitiveness of manufacturing in a “fiscally neutral way”. 

“We are not suggesting a big blunt instrument to suddenly correct this. What we are suggesting is tweaking and small changes on a variety of different elements that can improve our competitiveness,” he said.

In January, BMW chief executive Peter van Binsbergen was similarly cautious, saying a 50% tariff would be a shock to the system and could introduce unintended consequences. He suggested fine-tuning measurements in the Automotive Production and Development Programme (APDP) to encourage real production in South Africa. 

“Essentially, we need to make it viable for more brands to come to South Africa and then they become part of the solution,” Van Binsbergen said. 

Policy changes around NEVs in Europe and the UK could affect South African exports negatively, Toyota’s Kirby said. 

In 2025, South Africa exported 81% of locally manufactured vehicles to Europe and the UK, while only 8% were sold around Africa. This compared with 19% of locally manufactured vehicles exported to Africa in 2006 and only 21% to Europe. It illustrates that vehicle exports are heavily reliant on the UK and European markets. 

The European Union, however, has a target of a 90% reduction in emissions by 2035, while the UK will ban the sale of new internal combustion engine passenger vehicles by 2030. 

This has raised alarm among local manufacturers regarding South Africa’s readiness to export NEVs to their biggest market. 

Toyota and Lexus led SA’s NEV market, with a combined share of 58% in NEV sales. However, only 2.8% of the vehicles they sold last year were NEVs. 

South Africa would see a significant decline in exports to the UK and Europe over the next five years, Kirby said.

“We don’t have competitive new-energy vehicles. We have some but we don’t sell many locally and we haven’t localised those components. For us to be competitive with any vehicle, we need to have a scale to localise those components so that we can be competitive,” he said.

“We need to think about how we are going to adjust our approach. Most big markets around the world have put specific interventions into place. Supporting customers, supporting the business and creating penalties and incentives to accelerate the transition to NEVs.”

Volkswagen Group Africa managing director Martina Biene has also expressed her concern in this regard. 

At last week’s VW Indaba at the manufacturers plant in Kariega, she said that finalising NEV incentives under the APDP and clarifying legislation were essential to unlocking investment in NEV and battery electric vehicle production, building supporting infrastructure and making the vehicles affordable, particularly for export competitiveness.

Biene wrote to President Cyril Ramaphosa in December about the surging imports and the rising cost of doing business in South Africa, noting that only one in three cars sold in South Africa was locally manufactured.

Reports then circulated that VW’s plant faced closure. However, the manufacturer has since said that it remained committed to South Africa as it celebrated 75 years of building and selling vehicles in the country in 2026. 

Toyota said that turning the industry around required improving completely knocked-down competitiveness through APDP changes, aligning the development plan and NEV policy for a multi-pathway transition, accelerating the Africa Continental Free Trade Agreement to reduce reliance on exports to Europe and the UK and fixing the country’s structural constraints, among them electricity, water and logistics.