South Africa will present measures by the end of February to boost local vehicle production, including reviews of luxury taxes on imported cars and import tariffs, the government said on Tuesday.
The government is reviewing its automotive policy to address challenges, including the global shift to electric and hybrid vehicles, tighter emissions standards, evolving trade dynamics, and rising competition from low-cost Chinese and Indian imports.
South Africa lost its long‑held position as Africa’s largest vehicle producer to Morocco this year.
The Chief Director of Automotives at the Department of Trade, Industry and Competition, Mkhululi Mlota, told lawmakers his department was conducting a comprehensive auto policy review, which he said has been a slow process, in parallel with addressing concerns raised on local production.
“We’re looking specifically at how we can turn the tide on localisation. There are a number of proposals that have come from industry and other players on how we can do that. We should have a final proposal before the end of February” Mlota said.
Officials are also considering tax reforms that would favour local vehicle production. They include changes to the ad valorem tax, or luxury tax, and reassessing hiking tariffs on imported vehicles, the Deputy Minister of Trade, Industry, and Competition Zuko Godlimpi told lawmakers.
He said engagements with the National Treasury will commence soon.
Reuters/Shakirat Sadiq