South Africa’s automotive industry, Toyota South Africa CEO Andrew Kirby warned, while headline numbers suggest recovery, the sector remains structurally vulnerable.
Addressing the Toyota South Africa Motors’ annual State of the Motor Industry conference, Kirby called for urgent interventions to avert long-term decline.
In 2025, new vehicle sales grew by 15.7% to just under 600 000 units, the first meaningful growth in years.
However, Kirby cautioned that volumes are still far below the 2012–2016 peak.
“For a country of our size and mobility needs, 600 000 vehicles is not enough. We lack scale.”
The shrinking share of locally manufactured vehicles sold domestically has also been identified as a cause for concern. In 2016, around 60% of vehicles sold in South Africa were built locally. Today, that number has dropped to just 33%.
Meanwhile, exports reached a record 411 000 units, with 68% of local production shipped abroad and 81% of that concentrated in the UK and European Union.
“That concentration is a risk,” Kirby warned, noting tightening zero-emission vehicle mandates in Europe and the UK. “We cannot assume exports will remain at current levels.”
Kirby outlined four urgent interventions needed to reposition the industry for growth:
1. Strengthen local manufacturing competitiveness
Kirby called for targeted, fiscally neutral policy tweaks to improve the competitiveness of completely knocked down manufacturing.
South Africa, he argued, should aim for 40% to 50% of vehicles sold locally to be manufactured locally, striving for a healthier balance between imports and domestic production.
“Imports are important, but the country cannot afford to become purely import dependent. The forex impact alone is enormous,” he said.
2. Support new energy vehicle (NEV) transition
South Africa lags significantly in electrification, with only 2.8% of total vehicle sales classified as NEV last year – mostly hybrids.
Kirby urged the government to refine the Automotive Production and Development Programme (APDP 2) to better support low-scale NEV production and consumer adoption.
“The value proposition for battery electric vehicles is not yet strong enough on its own. Smart interventions are needed to unlock investment and demand,” he said.
3. Protect and diversify
export markets
With exports heavily concentrated in Europe, Kirby stressed the need to diversify trade destinations and strengthen regional integration under the African Continental Free Trade Area.
“We cannot rely on one market. We must build stronger automotive value chains across Africa,” he said.
4. Fix structural constraints.
Kirby also highlighted rising electricity costs, logistics inefficiencies at ports and rail, water security risks, and supply chain instability as urgent structural issues eroding competitiveness.
“If we don’t address these decisively, investor confidence will erode,” he warned.
Kirby’s sentiments were echoed by Billy Tom, chairperson of the Automotive Industry Transformation Fund and president of Isuzu Motors South Africa, who urged the government to provide long-term policy certainty beyond APDP 2 (calling for APDP 3) and clarify South Africa’s industrial roadmap beyond 2035.
Tom also stressed the need for contingency planning around key export agreements, such as Agoa, while accelerating reforms at Transnet to reduce logistics costs.
Kirby believes that with the right reforms, South Africa’s domestic market could exceed 700 000 annual vehicle sales and production could reach 720 000 units.
That, he said, would unlock R21-billion in additional manufacturing value and create at least 14 500 direct jobs – with thousands more across the value chain. “This is not about protecting the past,” Kirby concluded.
“It’s about building a competitive, future-ready automotive sector that grows, creates jobs and strengthens South Africa’s industrial base.”
Look out for the interview with Andrew Kirby on the upcoming SW Motoring podcast.
