Seen Here: Henk Ferreira, Acting Chief Executive Officer of the Retail Motor Industry Organisation (RMI), is calling for a stronger, more resilient South African automotive manufacturing sector amid growing uncertainty surrounding AGOA trade preferences. Ferreira emphasises the importance of expanding local content, strengthening existing manufacturing capabilities, investing in specialised technical skills and unlocking opportunities across the entire vehicle lifecycle. His message is clear: South Africa’s automotive future must be built on local capability, industrial innovation and sustainable economic value. Photo Credit: Supplied
RMI calls for stronger domestic manufacturing, expanded remanufacturing, investment in technical skills and a coordinated government-industry strategy to protect jobs and build resilience across the automotive value chain.
JOHANNESBURG, 5 November 2026 – Uncertainty surrounding South Africa’s preferential access to the United States market under the African Growth and Opportunity Act (AGOA) has renewed calls for the country to strengthen its domestic automotive manufacturing capacity, reduce import dependence and retain more economic value within its borders.
The Retail Motor Industry Organisation (RMI) says the changing international trade environment presents an opportunity to rethink localisation beyond traditional vehicle assembly, with greater emphasis on component manufacturing, remanufacturing, commercial vehicle bodies, trailers, maintenance and specialist technical skills.
The United States government’s announcement of its intention to withdraw South Africa’s preferential access under AGOA from 1 January 2027 adds pressure to an industry already navigating increased trade barriers and intensifying global competition.
While the consequences will differ across the automotive value chain, the RMI argues that South Africa’s response should focus on strengthening existing industrial capabilities, developing alternative export opportunities and creating a stronger domestic market for locally manufactured products.
At the centre of the debate is a critical question: how can South Africa retain more manufacturing value, support local businesses and build a competitive automotive industry that is less vulnerable to changing international trade policies?
Localisation gap exposes the scale of the challenge
The challenge is reflected in the gap between South Africa’s automotive localisation ambitions and its actual performance.
According to the National Association of Automotive Component and Allied Manufacturers (NAACAM), the South African Automotive Masterplan (SAAM) 2035 set a target of 48.2% local content by 2025, representing an estimated value of R101 billion.
However, actual local content reached 39% in 2025, compared with 38.7% in 2015.
The figures point to limited progress over a decade and highlight the need for a more practical approach to developing domestic manufacturing capacity.
Henk Ferreira, Acting Chief Executive Officer of the RMI, believes the solution requires a broader understanding of localisation, particularly within the commercial vehicle sector.
“International trade developments underline how important it is that we build a stronger domestic manufacturing base. While we cannot control trade policies in other markets, we can do more to strengthen local capability, support businesses already operating in the sector and retain more economic value within South Africa,” says Ferreira.
He argues that localisation should not be measured exclusively through new vehicle production and assembly, but across the full vehicle lifecycle.
This includes manufacturing components, rebuilding high-value parts, producing specialised vehicle bodies and trailers, maintaining commercial fleets and developing the technical skills needed to sustain these activities.
Commercial vehicles offer an opportunity for local growth
South Africa’s commercial vehicle market presents a potential platform for expanding domestic manufacturing and technical services.
According to naamsa’s September 2026 industry new vehicle sales data, 25,139 medium, heavy and extra-heavy trucks and buses were sold during the first nine months of 2026, representing an 8.5% increase compared with the corresponding period in 2025.
The growth points to sustained demand within the commercial transport sector. However, Ferreira cautions against assuming that these sales volumes automatically justify local production of major components such as engines, drivelines and cabs across multiple manufacturers and vehicle platforms.
Instead, he advocates focusing on areas where South Africa already has established expertise, infrastructure and industrial capacity.
These include component remanufacturing, commercial vehicle bodies and trailers, shared automotive components and specialist technical skills.
“The opportunity is to build on what South Africa already has, rather than assume that localisation must begin with establishing entirely new manufacturing operations,” he says.
Ferreira adds that commercial vehicles have extended working lives, creating opportunities to retain economic value long after their initial manufacture.
Through maintenance, repair, component production and remanufacturing, local businesses can support the transport and logistics sector while contributing to employment, small-business development and road safety.
Remanufacturing could unlock immediate industrial opportunities
One of the RMI’s key proposals is to expand South Africa’s remanufacturing industry, which offers an opportunity to strengthen local manufacturing without necessarily establishing entirely new production facilities.
Commercial vehicles contain high-value components such as engines, cylinder heads, turbochargers, diesel fuel injection systems, compressors, and braking and cooling components. These can be rebuilt to extend their service lives.
Remanufacturing retains the engineering and material value already invested in a component while creating additional economic activity through local machining, testing, specialist labour and technical expertise.
“Remanufacturing retains the engineering and material value already embodied in a component while adding local machining, testing, specialist labour and technical expertise,” Ferreira explains.
South Africa already has an established foundation in this field through the Automotive Remanufacturers’ Association (ARA), an RMI association representing automotive engineers, component remanufacturers and diesel fuel injection specialists.
Its members serve a range of industries, including highway trucking, buses, earthmoving equipment and stationary engines.
The RMI believes this existing capability can be expanded through stronger technical standards, improved access to suitable used components, increased customer confidence and investment in specialist skills.
Ferreira also argues that recognising remanufacturing as a form of manufacturing within relevant policy and incentive frameworks could help create a more supportive environment for businesses investing in the sector.
Local bodybuilders and component manufacturers need support
Beyond remanufacturing, the RMI has identified commercial vehicle body and trailer manufacturing as another important area for localisation.
Members of the South African Vehicle and Bodybuilders’ Association (SAVABA), also an RMI association, manufacture truck bodies, trailers, bus bodies and specialised vehicles.
Their products include tankers, tippers, refrigerated bodies, horse carriers, armoured vehicles and emergency services vehicles.
These manufacturers operate within applicable National Regulator for Compulsory Specifications (NRCS) and South African National Standards (SANS) requirements.
SAVABA is engaging with the Department of Trade, Industry and Competition (the dtic) and the International Trade Administration Commission of South Africa (ITAC) regarding the implications of ready-built vehicle imports for local manufacturing capacity.
The RMI believes that local production capabilities should be properly considered in trade and procurement decisions, particularly where South African manufacturers can meet the required specifications, certification and production demands.
There is also potential to expand the local manufacture of components used across multiple vehicle brands, allowing manufacturers to aggregate demand rather than depend on the production volumes of a single vehicle platform.
Research commissioned by the Localisation Support Fund and conducted by EY estimates that South Africa’s automotive aftermarket was worth approximately R106 billion in 2025 prices.
The study identifies batteries, automotive glass and brake friction products as potential localisation opportunities, highlighting the possibility of scaling existing manufacturing capabilities.
Ferreira says local production must remain commercially sustainable and competitive.
“Localisation must be commercially sustainable. The objective is not simply to manufacture a product locally, but to create businesses that can compete on quality, price, reliability and performance,” he says.
He adds that locally manufactured and imported products should be subject to equivalent safety and technical standards to promote fair competition and maintain consumer confidence.
Skills shortages threaten manufacturing ambitions
While investment, infrastructure and market access remain important, the RMI says skills development will be central to the success of South Africa’s localisation ambitions.
The organisation’s data indicates that the number of qualified artisans in key trades, including machinists, declined by as much as 8.3% between 2019 and 2023.
Reversing this trend will require sustained investment in apprenticeships, technical training, trade testing and workplace development.
Industry initiatives are already underway to strengthen the skills pipeline.
The new Automotive Machinist Occupational Trade Qualification has been developed through collaboration involving RMI Training, ARA, the National Artisan Moderation Body (NAMB), the Quality Council for Trades and Occupations (QCTO), merSETA and industry experts.
A pilot programme is currently being undertaken at Golden Arrow’s Western Cape facilities.
ARA and RMI Training are also working with Indlela, under the Department of Higher Education and Training (DHET), to re-establish machinist trade-testing capacity.
In addition, a Diesel Fuel Injection Technician apprenticeship is being revived in collaboration with Bosch SA, merSETA, QCTO and NAMB, while SAVABA is working to strengthen the skills pipeline for vehicle bodybuilders.
Through its merSETA-funded short skills programme, the RMI supported more than 1,500 learners across five regions in 2025.
Ferreira says these initiatives demonstrate industry’s willingness to contribute its expertise, workplaces and technical knowledge to developing the next generation of artisans.
However, he stresses that more funded apprenticeship opportunities, accredited trade-testing facilities and qualified assessors will be needed to translate industry commitments into a sustainable skills pipeline.
RMI calls for stronger government-industry collaboration
To unlock the sector’s potential, the RMI is advocating for a coordinated programme between government and industry, built around practical interventions that strengthen existing manufacturing capacity.
Its proposals include:
- Including commercial vehicles in automotive policy reviews: Medium, heavy and extra-heavy vehicles should have a defined place in the policy framework, with localisation assessed across the vehicle’s full economic lifecycle.
- Recognising remanufacturing as manufacturing: Relevant incentives and standards should support legitimate remanufacturing businesses while distinguishing remanufactured components from repaired parts.
- Using public fleet procurement strategically: Government departments, municipalities and state-owned entities should consider durability, warranty, repairability, vehicle downtime, turnaround times and local economic contribution alongside purchase price.
- Funding the artisan development pathway: Greater collaboration is needed to expand apprenticeships, technical training, assessment, trade testing and continuing professional development.
- Applying equivalent standards to imports and local products: Consistent safety and technical requirements can promote fair competition and strengthen consumer and fleet confidence.
- Supporting local body, trailer and specialised vehicle manufacturers: Trade and procurement decisions should take existing domestic production capabilities into account where manufacturers can meet the required standards and specifications.
The RMI believes these measures could help improve the operating environment for local businesses, encourage investment and strengthen the contribution of the commercial vehicle sector to South Africa’s industrial development.
“These are practical opportunities for government and industry to work together. They are about making better use of existing capability, improving the conditions for investment and ensuring that localisation is commercially viable over the long term,” Ferreira says.
Building resilience beyond international trade agreements
The uncertainty surrounding AGOA has placed renewed focus on the vulnerabilities associated with dependence on preferential access to international markets.
For South Africa’s automotive industry, the challenge extends beyond protecting export opportunities. It also involves building a domestic industrial ecosystem capable of supporting manufacturing, maintaining vehicles, developing components and sustaining specialised technical skills.
The RMI’s position is that South Africa does not need to start from scratch. Existing remanufacturers, vehicle bodybuilders, component producers, technical training institutions and aftermarket businesses provide a foundation on which a stronger manufacturing base can be developed.
The opportunity now lies in connecting these capabilities through supportive policy, commercially viable investment and effective partnerships between government and industry.
As global competition intensifies and trade relationships evolve, the long-term competitiveness of South Africa’s automotive sector may increasingly depend on how effectively it develops and retains value at home.
AGOA uncertainty may create new challenges for South Africa’s automotive industry, but it also sharpens the case for a stronger local manufacturing base – one built not only around the vehicles produced, but around the components, skills, services and businesses that keep them moving.
