South Africa is set to end semi-knock-down (SKD) vehicle assembly operations by 2026 as part of a government initiative to promote local manufacturing. Trade, Industry and Competition Minister Parks Tau announced the policy shift during SA Auto Week 2026 in Durban. The move aims to protect jobs and enhance the competitiveness of the country’s automotive industry.
Under the proposed changes, the government will phase out SKD assembly, which involves importing partially assembled vehicles and completing them locally. This approach has been criticized for contributing to a trade deficit and limiting the growth of local automotive industries. The policy shift is expected to encourage greater investment in full local manufacturing, creating more sustainable jobs and reducing reliance on imported components.
The decision follows years of discussions on improving the automotive sector’s contribution to the economy. South Africa’s automotive industry has faced challenges including high import tariffs, limited local content requirements, and competition from neighboring countries. By focusing on full local manufacturing, the government hopes to align with international trade agreements and attract more foreign direct investment. The policy is part of broader economic reforms aimed at diversifying the economy and reducing its dependence on raw material exports.
