Let’s Talk Exports – Policy change required to sustain the South African automotive industry
At the core of our organisation has always been a simple understanding: exports are a critical contributor – to the economy, yes, of course, but also to greater society. Businesses that export are able to contribute significantly to the country’s GDP, invest in the community, create meaningful employment opportunities, and ultimately demonstrate on a global scale that South Africa is worth investing in.
However, there is not often such a tangible case study of this importance, as we saw with recent media reports around Volkswagen Group Africa’s plant in Kariega. Following a media event hosted by the automotive manufacturer, we saw dramatic headlines about the plant potentially closing and almost 4 000 jobs being at stake. These claims have since been refuted by the company, but the widespread panic emanating from these reports is worth reflecting on.
Consider for a moment the impact of a company like VWGA closing: they have been building cars in South Africa for 75 years, employing around 3 500 people and carrying the indirect impact of 50 000 jobs throughout the supply chain. This is without accounting for the many CSI projects reliant on their ongoing support.
Why are we even talking about this “closure” if it is not happening? It highlights an issue being experienced across the automotive industry in South Africa: government incentives in their current form do not adequately reflect the importance and value of this industry in our overall economy. Our local manufacturers are competing in a market flooded by imports from foreign brands who are able to produce high volumes at significantly lower costs, and there is little preference or benefit given to the companies creating jobs for our people by producing cars here. In the last year, we’ve seen Goodyear close its Kariega facility and Nissan sell its South African plant; it is not news that the automotive industry is facing challenging times.
In the case of Volkswagen, these circumstances have directly impacted their business, in that MD Martina Biene was quoted as saying their German headquarters “need to see movement” in terms of government policies, as this is a factor in decision-making around future investments.
The industry leaders have many ideas for possible solutions – including incentives for local manufacturing and establishing localisation thresholds – but ultimately there is one obvious answer: government policy needs to change. Our exporters – automotive or otherwise – may serve overseas markets, but the people who benefit most are in this country. We need government policy to protect the interests of our manufacturers, and the communities who rely on them every day.
By Quintin Levey, Exporters Eastern Cape Chairman
Published in The Herald, February 2026
