AUTOMOTIVE SECTOR: POLICY SUPPORT FOR PARTIALLY ASSEMBLED VEHICLE EXPORTS TO CHANGE?

AUTOMOTIVE SECTOR: POLICY SUPPORT FOR PARTIALLY ASSEMBLED VEHICLE EXPORTS TO CHANGE?

• 15 October 2026
• Trade, Industry & Competition
• SA Legal Academy

Government intends phasing out policy support for the manufacture and export of partially assembled and finished vehicles – a move expected to discourage the establishment of any new ‘semi-knock-down’ (SKD) facilities in South Africa (SA). This is according to a media statement on Trade, Industry & Competition Parks Tau’s address at a recent SA Auto Week event in Durban – delivered on behalf of President Cyril Ramaphosa.

Apparently, plans for the policy change have emerged over time in the context of an ongoing review of the Automotive Production & Development Programme’s (APDP) Phase 2. The South African Revenue Service (SARS) website describes the programme as ‘a government-led initiative designed to guide the South African automotive industry to 2035, promoting investment, production, exports, and local value addition’.

Comprising ‘rebates and refunds’, the programme is ‘legislated’ under item 317.04 of Schedule 3 to the 1964 Customs & Excise Act, as amended. It applies to ‘motor vehicle manufacturers and/or original equipment manufacturers importing original equipment components for use in the manufacture of specified motor vehicles’.

Among other things, the departmental statement on the Minister’s address notes that:

• medium and heavy commercial vehicle manufacture will be excluded from the planned policy change
• the ‘legal definitions’ informing government policy on ‘complete-knock-down’/CKD’ manufacturing will be ‘strengthened’ (referring to the manufacture and export of a product’s disassembled components, which are shipped separately for assembly in the destination country)
• the ‘strategic competitiveness’ of South Africa’s ladder frame light commercial framework chassis segment is believed to warrant ‘formal investigation’, and
• ‘any additional protection’ for local manufacturers should be accompanied by ‘reciprocal commitments’ relating to:
  • production
  • localisation
  • employment
  • transformation
  • exports, and
  • investment.

Please click the links below for more information:

• media statement
• SARS website page on APDP Phase 2

Published by SA Legal Academy Policy Watch

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