SOUTH Africa’s Eastern Cape automotive sector, the backbone of the province’s economy and a major national employer, is “stagnant” and at risk of losing ground without urgent government intervention on electricity, logistics, tariffs and electric-vehicle policy.
This warning was issued during Parliament’s Portfolio Committee on Trade, Industry and Competition’s recent oversight visit to the province.
The committee’s two-day oversight visit to the East London Industrial Development Zone and the Mercedes-Benz South Africa plant on 19 and 20 March exposed a sector under severe pressure despite its continued contribution to component localisation, skills development and job creation.
Automotive Industry Development Centre Eastern Cape (AIDC-EC) CEO Thabo Shenxane and chairperson Phumzile Zitumane, led the engagement, providing insights into component supplier support, automotive policy issues, projects in the electric vehicle (EV) space and explaining how the centre is supporting SMMEs in the aftermarket industry.
FOUR-PILLAR ROADMAP
According to AIDC-EC, the Eastern Cape remains the heart of the country’s vehicle manufacturing sector but Shenxane warned the industry is currently “stagnant” rather than growing.
To spark a new era of expansion, the AIDC-EC outlined its four pillar roadmap which includes: the need to engage in automotive policy issues; transitioning from Internal Combustion Engines (ICE) to EVs, the empowerment of vehicle maintenance and repair SMMEs and the strengthening of component suppliers who employ more than 39,000 people in the province.
The AIDC-EC told the committee it is preparing the province for the global shift to EVs. A standout achievement highlighted was the establishment of 15 EV charging stations across the province, linking urban centres to rural areas like Libode, Tsolo and Silaka Nature Reserve in Port St John’s.
“You are not going to have a population of EVs coming and moving through our province if we do not invest in infrastructure, knowledge and skills,” Shenxane said.
The electric vehicle roadmap also emphasises the need for awareness programs to educate government officials and the public on e-mobility, ensuring the Eastern Cape is not left behind.
POLICY AND INFRASTRUCTURE GAPS
The AIDC-EC presented several urgent recommendations from the sector to the committee including:
- A call to promote Completely Knocked Down (CKD) manufacturing, managing import duties and the rise in imports.
- Protection for locally based original equipment manufacturers (OEMs) through enabling policies, such as government procurement of vehicles produced by locally based OEMs
- Incentives to support SMMEs in the aftermarket.
- A policy decision to fully utilise the Port of East London to alleviate chronic congestion at the Port of Durban.
- The need to address load shedding and energy security to stimulate investments
- Dealing with crime which is a major deterrent to foreign investors.,
- A proposal to create a provincial fund to protect Tier 2 and Tier 3 suppliers from global tariff shocks – such as African Growth and Opportunity Act (Agoa) uncertainty – and geopolitical volatility.
- Recognising the Middle East war will soon affect Europe, the biggest market for South Africa, which means it will suffer in the medium to long term.
Committee chairperson Mzwandile Masina said that while the automotive industry has made a significant contribution to the Eastern Cape’s economy, its long-term sustainability cannot be taken for granted.
“The committee will engage relevant stakeholders to address some of the key challenges facing the automotive industry and other businesses in the Eastern Cape,” he said.
Masina warned without clear direction on electric vehicles, “manufacturers may delay or forego critical investments in new technologies, putting local production, jobs and export markets at risk.”
He acknowledged the need for better coordination between national, provincial, and local government and committed to exploring the formation of a working group to tackle the issues with clear timeframes.
AFTERMARKET PARTNERSHIP LAUNCHED
The oversight visit comes as the AIDC-EC and the Retail Motor Industry Organisation (RMI) announced a partnership to transform the aftermarket sector. As the largest employer in the automotive value chain, the aftermarket is vital to job creation and economic growth.
In a joint statement the organisations highlighted focus areas of their new partnership. These include ensuring compliance with industry automotive industry standards and Occupational Health and Safety compliance, discussions on launching a unified skills programme, apprenticeship programme and artisan recognition of prior learning, implementing an e-mobility skills model featuring online and technical face-to-face training to prepare for the shift towards EVs.
AIDC-EC and the RMI said they would also partner to provide training, mentorship and operational capacitation for SMMEs, while targeting the support of 300 historically disadvantaged individuals. Their work will be aligned with the South African Automotive Masterplan 2035 (SAAM 2035), to include supporting SMMEs in the aftermarket industry, and they will also assist businesses to register with the Companies Intellectual Property Commission, SARS and the Motor Industry Bargaining Council to move toward becoming accredited RMI members.
“The challenges facing the Eastern Cape automotive landscape are unique, and they demand a tailored approach that addresses their specific provincial needs while driving national transformation goals,” Shenxane said.
SKILLS DEVELOPMENT DRIVE
The next phase of the partnership involves a high-level consultative workshop to finalise a sustainable funding model and implementation plan to advance the shared vision.
This partnership coincides with recent AIDC-EC support measures rolled out for SMMEs in the aftermarket, alongside a roadmap to future-proof the industry.
The centre and its partners launched the SMME Tools, Equipment and Machinery Project in the Chris Hani District at Sisa Motor Clinic in Manzana Village, eNgcobo on March 20.
The initiative, backed by the Department of Economic Development, Environmental Affairs and Tourism, the Eastern Cape Development Corporation and the Chris Hani District Municipality, saw vehicle lifting equipment, diagnostic tools and workshop machinery handed over to 19 registered businesses. The aim is to enable township and rural mechanics to transition towards effectively competing with established automotive businesses.
“People who are fixing cars are in business as well,” said Khaya Njingolo, executive manager of the Aftermarket Support Programme at the AIDC-EC.
Njingolo also highlighted the need to regulate and support the industry.
Eastern Cape MEC for Economic Development, Environmental Affairs and Tourism, Nonkqubela Pieters, outlined the sector’s strategic importance.
“Leading our regional economy is the automotive sector, with agriculture as its vital partner. These industries are the backbone of the Eastern Cape – they are non-negotiable for our future,” she said.
The project includes dedicated skills training through AIDC-EC, compliance with Occupational Health and Safety standards and insurance requirements, and learnerships aimed at youth to combat unemployment.
On the skills front, the centre highlighted its recognition of prior learning project, which has enabled 55 veteran technicians to earn Red Seal certificates since June 2025. The qualification gives international recognition to artisans who have worked for decades without formal schooling and helps retain the R260 million provincial vehicle-maintenance budget within the province.
