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[File Image] Minister of Trade, Industry and Competition, Parks Tau, speaks during a press conference in Washington, DC, in the United States on 21 May 2025.
The Department of Trade, Industry and Competition is engaged in talks with Algeria and Egypt on ways to cooperate with South Africa in the automotive sector.
Minister Parks Tau, who is in Algeria for the fourth Intra-African Trade Fair, led a delegation of 30 South African businesses to promote greater trade.
The discussions come as the automotive industry grapples with headwinds, including the influx of cheap imports, tariffs on vehicle exports to the US and increasing jobs cuts.
US Tariffs | Impact on South Africa’s automotive sector:
Tau says South Africa is exploring closer ties with North Africa’s biggest economies to strengthen the country’s strained automotive sector.
This includes a proposed crosscutting MOU to coordinate joint action.
“We’re also reaching out to other automotive manufacturing countries, but we thought it’s important that we start there. And that would include cooperating on areas where we would be able to build component manufacturing capabilities in Algeria, we would be able to consolidate. And the extent to which we create production that is able to access the African market, but also the export market.”
“And the extent to which we can complement each other, because sometimes we tend to compete amongst each other when in fact there are greater opportunities in identifying where we have complementarities and cooperation,” adds Tau.
Tau says government’s objective at home is to deepen the sector’s value chain, with the aim of raising local content in vehicle manufacturing to 65% from the current average of about 40%, with some companies operating at different levels.
“We do intend to ensure that we’re able to increase that level of localisation. Now the problem is industry in South Africa and other countries that are auto manufacturers say, look, if we have a situation where sister countries assemble instead of manufacture, you make it less competitive for the local industry. It undermines our component sector. So we need to find agreement on those issues and that’s what the negotiations are about.”
This round of talks follows last year’s state visit to Algeria, where the two countries signed multiple agreements, including one on economic cooperation.
