New Study Proposed Bus Localisation Targets

The Localisation Support Fund suggests raising local content in bus manufacturing to fifty percent to boost the national economy.

Updated on Oct. 14, 2026 in Auto Parts

Isometric editorial illustration of a heavy-duty steel bus chassis, representing national industrial manufacturing policy and assembly. — The Localisation Support Fund recommends increasing local bus content to fifty percent, aiming to boost job creation and national industrial capacity. AI Illustration. Upload story photo >

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Should the government mandate higher local content requirements to support domestic manufacturing despite potential price increases?

A new study released by the Localisation Support Fund recommends structural policy changes to increase local content in South African buses from the current 32% to 35% range up to 50%. The report argues that inconsistent procurement rules have limited domestic assembly and inhibited potential industry growth.

Why it matters

Boosting local manufacturing content aims to stimulate job creation and increase GDP, with each 1% gain in local content estimated to support 325 full-time roles. However, the transition may increase the capital cost of individual buses by approximately R300 000.

South Africa purchases approximately 1 000 new buses annually, though imports currently represent 60% to 70% of the total vehicle value. While bus bodies already contain 70% to 90% local content, the overall vehicle integration remains below the recommended 50% target.

The players

Localisation Support Fund

This organisation conducts research and advocates for policies that increase domestic manufacturing content in South Africa.

The details

The study identifies fragmented procurement processes and uneven enforcement across tenders as primary barriers to growth. Researchers suggest that pooling municipal purchasing into buyer clusters could offset cost increases by reducing capital expenditures by 10% to 15%.

2017: Yearly bus sales reached 1 099 units.
2021: Yearly bus sales fell to 665 units.
2024: Yearly bus sales recovered to 945 units.
14 October 2026: The Localisation Support Fund released the study.
Next five years: Electric and hybrid buses are planned to be brought into the content framework.

Roadmap

The proposed shift reflects a broader national strategy to reduce reliance on imported components and bolster domestic assembly capabilities. This evolution positions South Africa to move away from fragmented purchasing models towards a more integrated and efficient industrial landscape.

If implemented, the pooling of municipal bus procurement could potentially lower public transport costs by 50c to R1 per trip through improved capital efficiency. However, the increased local content requirements may initially impact the pricing of new vehicle tenders for municipal operators.

The takeaway

Increasing domestic manufacturing content is expected to support 325 jobs for every 1% of growth achieved. Policymakers and industry leaders will need to balance these long-term economic gains against the immediate R300 000 capital cost increase per vehicle.