The automobile industry in South Africa: an economic and social engine
South Africa, despite a relatively small domestic automobile market, plays a major role in the automobile industry on the African continent. Indeed, this sector represents around 110,000 direct jobs and nearly half a million indirect jobs, making it one of the main job providers in the country.
According to an annual report from the French Embassy in South Africa, the automotive industry mainly employs historically disadvantaged and low-skilled populations, helping to reduce the country’s high unemployment rate, which exceeds 33%.
A positive development can also be noted in terms of diversity and inclusion in this sector. Between June 2021 and June 2022, more than half of the jobs created by automobile manufacturers (OEMs) were for black people, and more than half were young people. This speaks to ongoing efforts to increase representation and provide opportunities to underrepresented groups in the industry.
The South African automotive industry also contributes significantly to the country’s economy. In 2022, it represented more than 17% of added value and nearly 5% of GDP. However, these figures are down compared to 2019, before the Covid-19 pandemic. Despite this, the automotive industry continues to be a key economic pillar for South Africa.
Regarding the country’s automobile fleet, it has approximately 12.9 million vehicles, including 7.6 million passenger cars. However, it is important to note that many South African households cannot afford to acquire and maintain a vehicle, with almost 23% of the population living below the international poverty line.
As for new vehicle sales, they experienced growth of 14% between 2021 and 2022, reaching nearly 530,000 units sold. However, this figure remains more than 4% lower than that of 2019, before the health crisis. Passenger cars account for the majority of sales, followed by light commercial vehicles (pick-ups and utility vehicles) and buses and trucks.
Despite this performance, the electric vehicle market in South Africa still remains marginal. Only 1.2% of total vehicle sales are electric or hybrid vehicles, well below the global average. This highlights the expansion potential of this market in a context of transition towards more sustainable mobility solutions.
In conclusion, the automotive industry in South Africa plays a crucial role in the country’s economy, creating jobs, contributing to GDP and providing opportunities for social inclusion. However, challenges remain, particularly in terms of access to vehicles for low-income populations and the promotion of electric mobility.. Continued efforts are needed to strengthen this key sector and make it a lever for sustainable development for South Africa.