South Africa has secured significant investments from major Chinese and Indian automakers, marking a pivotal moment for the country’s automotive sector. The move is expected to boost local manufacturing, create jobs and strengthen South Africa’s role as a regional auto production hub.
According to Trade, Industry and Competition Minister Parks Tau, both Chinese and Indian manufacturers have committed to increasing their investment in South Africa by moving from semi-knocked-down (SKD) operations to complete knocked-down (CKD) vehicle production.
“In both those markets, the companies that have SKD operations in South Africa have committed to transition to CKD, this will help strengthen the local automotive industry and support broader economic growth,” said Tau.
The new commitments come from companies such as Great Wall Motors and Chery Automobile of China, as well as Mahindra from India.
Tony Lui, regional CEO of Chery South Africa told Reuters that the company is exploring ways to increase production and work with other car manufacturers.
“We are in discussions with several existing OEMs (original equipment manufacturers). Greenfield takes a little bit longer,” said Lui.
Industry experts believe the shift toward CKD manufacturing will boost job creation, improve technical skills and expand opportunities for small and medium-sized suppliers. According to analysts, building more vehicles locally could generate stronger value chains, particularly in parts manufacturing, logistics and local component production.
The sector contributes approximately 6–7% of South Africa’s GDP and directly employs around 110,000 people, with additional employment supported through supplier networks.
Meanwhile, Indian automaker Mahindra is expanding its presence in the country with a new assembly plant in Durban. The project, supported by both the private sector and local government, is expected to add hundreds of jobs and drive growth in the KwaZulu-Natal automotive corridor.
City of eThekwini mayor Cyril Xaba described Mahindra’s investment as a positive sign for the economy.
“We are not just opening a factory, but we are celebrating a significant investment in our community, a solid partnership between the public sector and private sector and a step forward for our automotive industry,” Xaba said.
These developments align with South Africa’s Automotive Masterplan 2035, which aims to increase local vehicle production to 1.4 million units annually, promote component manufacturing and strengthen export competitiveness. The plan also supports skills transfer, infrastructure investment and cleaner vehicle technologies.
Economists say foreign investment from China and India signals growing global confidence in South Africa’s industrial policies. The success of these partnerships could also encourage further investment from other markets, including electric vehicle producers.
olga@vutivibusiness.co.za
