South Africa’s ICE Automobile Exports Decline by 23% In 2024


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Rising competitors from EVs in key markets cited as one of many causes for sharp decline.

Six years in the past, I wrote an article on how South Africa might miss out on the large alternatives from the EV transition if the nation didn’t act quick sufficient. That’s as a result of the auto trade is a key pillar of South Africa’s financial system however makes ICE automobiles in a world shifting fairly swiftly to electrical. In line with experiences from South Africa’s Automotive Enterprise Council, naamsa:

  • The automotive trade contributes 5.3% to GDP [3.2% manufacturing and 2.1% retail];
  • In 2023, the export of automobiles and automotive elements reached a file quantity of R270.8 billion, equating to 14.7% of South Africa’s complete exports;
  • The trade accounts for 21.9% of the nation’s manufacturing output;
  • Automobiles and elements are exported to 148 worldwide markets;
  • The manufacturing section of the trade presently employs within the order of 116,000 folks throughout its numerous tiers of exercise [from component manufacturing to vehicle assembly];
  • Mixed with the trade’s robust multiplier impact, the trade is chargeable for roughly 498,000 jobs throughout the South African financial system’s formal sector.

The issue is over 99% of the automobiles manufactured in South Africa for export are full ICE automobiles and many of the nations the place the automobiles produced in South African are being exported to are seeing growing adoption of electrical automobiles. “A big two out of each three automobiles manufactured in South Africa are exported, enabling the home OEMs to succeed in a wider client base past the South African market,” naamsa says. “Exports stay key to generate adequate economies of scale, and to realize improved worldwide competitiveness. As an export-oriented trade, the home automotive sector has embraced the commerce alternatives by way of the precise commerce preparations that South Africa has concluded over the previous three many years, opening sure markets in Europe, the US, and Africa, amongst others.”

Naamsa provides that for the primary time since COVID-19 dramatically affected 2020, automobile exports declined in 2024, to 308,830 items, down by a considerable 22.8% in comparison with the file efficiency of 2023 when the trade exported 399,594 items. Numerous elements impacted the plummeting in automobile exports, together with a slowdown in demand within the EU, the home automotive trade’s key export area, as a consequence of low financial progress, stricter emission guidelines, and competitors from cheaper electrical automobile imports from China within the area, in addition to the timing impact of recent mannequin introductions within the home market by a significant exporting OEMs.

South Africa’s Auto Export Gross sales Efficiency From 2020 To 2024

Sources: naamsa, Lightstone Auto

One of many primary causes cited for the sharp decline in exports was growing competitors in these key export markets from “cheaper electrical automobile imports from China” in 2024. However who can say they didn’t see this coming? We wrote about this 6 years in the past! South Africa wanted to maneuver quicker to extend the portion of electrical automobiles made in South Africa.

Have a look at the UK for instance. In line with the Society of Motor Producers and Merchants (SMMT), new automobile registrations reached 1.953 million in 2024, with the market up 2.6% 12 months on 12 months. EVs took a file annual quantity and market share at 19.6%. Purchases had been pushed by company-related purchases as a result of finish of incentives for personal consumers. Non-public client demand contracted to ranges final seen within the pandemic, with only one in 10 non-public consumers going electrical in 2024. Nevertheless, EVs nonetheless made up 20% of all gross sales in 2024 within the nation. This share will doubtless preserve going up consistent with mandated targets for the UK. Meaning, if South Africa needs to maintain exporting important volumes, it wants to start out including extra EVs to its export combine. South Africa wants to take action ASAP.

South Africa has began to make some strikes. Final week, the nation introduced a 150% tax deduction on funding in electrical and hydrogen-powered automobile manufacturing. Nevertheless, this kicks in from 2026. Why not instantly? South Africa wants to maneuver quicker on this.

So, supply-side incentives are coming. What about demand facet incentives for the native South African market? Nicely, there may be an EV inexperienced paper and all — let’s hope a few of the key suggestions are launched sooner moderately than later.

On common, the native part portion in automobiles made in South Africa is at present at 38%. The federal government has a purpose of accelerating the native part share to 60% by the 12 months 2035! 2035 is an fascinating 12 months as many countries, lots of whom would function prominently on the record of South Africa’s 155 export locations, are aiming to affect. With fewer shifting components in EVs, electrical automobiles appear to current a quicker manner of reaching this South African goal. This may also assist efforts to extend the beneficiation of native sources in addition to useful resource wealthy neighbouring nations corresponding to Mozambique and Zimbabwe in addition to regional nations corresponding to Zambia and the Democratic Republic of Congo. The entire nations have many of the key components for producing electrical automobile elements.

Maybe it’s time for South Africa to additionally have a look at positioning itself as a regional hub for the manufacturing of electrical automobiles for Southern Africa and past on the African continent. EVs such because the BYD Seagull and Wuling Bingo come to thoughts. A number of nations import over 50,000 used automobiles per 12 months. For 20 nations, that’s a minimum of 1 million automobiles per 12 months. If we are saying 30% of them are on this small automobile section, that’s a minimum of 300,000 automobiles per 12 months, which might make a good addressable market to start out with.

These 300,000 could possibly be shipped as utterly knocked down kits after which assembled regionally in these respective nations on the African continent, progressively growing the contribution of native elements. The potential advantages that could possibly be derived from this might be big for nations on the continent. These embrace:

  • Job creation on the newly arrange or expanded meeting crops
  • Improvement and growth of companies and related part producers alongside the downstream industries
  • Beneficiation of native sources
  • Abilities growth and coaching of employees in new industries
  • Partnerships with native universities, technical schools, and analysis establishments in numerous areas of analysis and growth
  • Elevated adoption of EVs leading to discount of fossil gas imports, saving a lot wanted international foreign money.
  • Crucial mass of automobiles would catalyse the expansion of versatile automobile financing platforms and different new progressive enterprise fashions backed by good warranties. At the moment the used automobiles don’t have any guarantee.
  • Decrease operational prices for ride-share driver companions in addition to industrial fleet operators corresponding to automobile rental companies boosting fleet gross sales.
  • Development of synergistic companies corresponding to distributed photo voltaic for charging EVs.

South Africa simply wants to maneuver a complete lot quicker and step up its EV sport!



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