The South African automotive industry and government have not yet found “that sweet spot” that would shore up the local manufacturing sector as it faces declining local parts content and increasing competition from imports, says naamsa | The Automotive Business Council president and BMW Group South Africa CEO Peter van Binsbergen.

Government is reviewing the second iteration of its Automotive Production Development Programme this year, amid a rapidly changing global automotive industry.

The automotive manufacturing support programme is set to run to 2035.

Speaking during the launch of the Automotive Trade Manual 2026 on Friday, Van Binsbergen confirmed that talks were ongoing between naamsa, the National Association of Automotive Component and Allied Manufacturers and the National Union of Metalworkers of South Africa to develop recommendations to government on how to adapt its policies to strengthen the local automotive manufacturing industry “without any unintended negative consequences on other parts of the industry, or the consumer”.

“This is a complex topic,” said Van Binsbergen. “We are not there yet and I can say that clearly. We are working hard, together with government and each other. The current process is very constructive, but we are not there yet.”

Steeper import duties on vehicles from China, and/or a cut in the ad valorem tax levied on locally made vehicles have been placed on the table earlier this year as possible solutions to strengthening South Africa’s biggest manufacturing sector.

Van Binsbergen also on Friday commented on the impact of the current Iran conflict on the local industry, noting that the effect “was very brand specific, depending on your logistics network, where your regional parts warehouses are – those kinds of things”.

He added, however, that all brands shared the same concern around increased fuel prices and the potential knock-on effect in terms rising inflation, increasing interest rates and declining consumer confidence, which “would hit us all equally”.

Toyota South Africa Motors CEO Andrew Kirby noted that the Durban-based manufacturer had been experiencing challenges in its exports into the rest of Africa.

“In East Africa we have shipping lines that traditionally trans-ship through the Middle East. We are trying to find alternative routes, so that has had an impact on us, but we are working our way through that.

“We still have a couple of ships stuck in that area with vehicles, but in terms of ongoing business we have been able to find alternative routes.”

Kirby added that a secondary challenge of the Iran conflict had been the significant impact on the cost of global logistics, as well as delays in logistics chains.

Also, as shipping lines had been forced to move around the conflict-ridden Middle East, it had caused congestion on other routes, such as to and from Singapore.