Car production in South Africa could double by 2020 image

According to a local producers’s group, the carmaking industry in South Africa could increase by as much as 50% to 900,000 cars by 2020. That is to happen if the government continues to promote stable and supportive policies and the car sector does not encounter any labor interruptions.

Nico Vermeulen, the director of the National Association of Automobile Manufacturers of South Africa (NAAMSA), stated in an interview that took place in Johannesburg that “It is feasible. We’ve factored into that estimate or target the possibility of new entrants coming into this market.”

Since the recession that started in 2009, the auto industry in South Africa is one of the few sectors growing in an economy that is expanding at the slowest pace yet. The government’s auto-incentive program in South Africa has gained interest from Toyota Motor Corp., Ford Motor Co. and BMW AG, all of which decided to set up and invest in building plants there. The reason behind the growth in both investment and output is basically the increased export demand which has led to shipment reaching 375,000 units in 2016.

According to Vermeulen, NAAMSA is predicting that production will increase even more from 616,000 cars in 2015 to 682,000 in 2017. Another step into increasing production in South Africa would be a planned investment from China’s Beijing Automotive International Corp. that will build a manufacturing factory in the southern coast city of Port Elizabeth, one of the largest cities there, east of Cape Town. Vermeulen added that South Africa is also to review car taxes, to improve fuel quality and take into account incentives for hybrid and electric vehicles, all in order to boost car productivity and the car sector there.