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The History of the Motor Car Industry in SA

Published on: 24 April 2015

The motor car industry has grown on a global scale over the years, with many different branches: ranging from car manufacturers and panel beaters to car insurance providers and mechanics coming into being. But what about locally, in South Africa?

Let us take a brief look at the history of the motor car industry in SA.

South Africa was actually quite quick to jump on the proverbial bandwagon with regards to the motor car ‘boom’ that occurred in the 20th century. In fact, by the 1920s, the first local car assembly plants were established, all of which were protected by high tariffs. The domestic industry became incredibly competitive, which led to the production of a number of new makes and models. However, due to the small scale of the domestic market, high prices were inevitable.

As the industry continued to develop, the government implemented five phases of support between the years of 1961 and 1989. All of the phases favoured simplistic automotive production for the domestic market and the aim was to increase the use of local content, which started off at just 15%, to 66% by the end of Phase V (1980-1989).

One of the main things that has affected the growth and transformation of the automotive industry in South Africa is that of government policies and affairs. Apartheid, being the most extreme and damaging of the government policies, was largely responsible for transforming the industry – and not in a good way. All in all, the apartheid era was responsible for a complete halt in the growth of the vehicle industry within our country. This was largely due to the boycott of South African trade by countries that were against the regime. This ultimately led to the domestic industry becoming even more competitive.  

However, since the introduction of MIDPs (Motor Industry Development Programmes) in September of 1995, there has been a marked improvement in the worldwide competitiveness of our local automotive industry. When these programmes were introduced the aims were to reduce tariffs, to improve the competitiveness of South Africa’s automotive industry, to improve vehicle affordability, to improve quality and productivity and to stabilise employment levels within the industry. While many would argue that we have yet to achieve these goals, it is certain that there has been a marked improvement overall.

In the early 2000s, the SA automotive industry was doing quite well until the global recession really made its presence known in 2008. There was another obstacle that resulted in negative growth rate towards the end of 2013. This was due, in large part, to the strikes within the automotive industry, which took a toll on productivity and factory output at the time. The industry has been working its way back up since then and showed it resilience by the end of 2014 with 630 000 new vehicles sold that year.

So, what does the future look like for the SA automotive industry?

Experts claim that the industry will remain profitable; however, for the next year or two at least, massive growth is unlikely. Seeing as though the local industry has continued to climb, prosper and overcome a variety of difficulties over the decades, it is still certain that there are plenty of positive results to look forward to in future.

If you want to protect your vehicle, be sure to invest in affordable and reliable motor insurance. Contact MiWay today for more information.

For A Brief History and Overview of the Motor Car Industry in South Africa, click here.