South Africa To Phase Out Semi-Knocked-Down Car Plants

The government is ending policy support for semi-knocked-down assembly to bolster full local manufacturing.

Updated on Oct. 16, 2026 in Auto Parts

Isometric editorial illustration of an industrial vehicle chassis on a production conveyor frame, representing South Africa's automotive manufacturing policy shifts. — South Africa is phasing out policy support for semi-knocked-down vehicle assembly to incentivize comprehensive local manufacturing and higher-value job creation. AI Illustration. Upload story photo >

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Should the government prioritize local manufacturing requirements over the use of imported vehicle assembly kits?

South Africa is set to phase out semi-knocked-down car assembly plants as part of a move to strengthen the legal definition of local vehicle manufacturing. New assembly sites using this imported kit method will no longer receive government policy support.

Why it matters

Existing industry leaders argue that current semi-knocked-down practices undermine major investments and generate fewer jobs than complete knock-down manufacturing. By tightening these definitions, officials hope to ensure that local production generates higher value for the economy.

The nation aims to reach a 60% local content threshold for vehicles, rising significantly from the 39% average recorded in 2015. Officials have set a target to contribute 1% of total global vehicle output by 2035.

The players

Department of Trade, Industry and Competition

This national department is responsible for industrial policy, economic development, and international trade regulation within South Africa.

International Trade Administration Commission

The commission is a statutory body tasked with investigating trade-related matters and advising on the implementation of industrial development policies.

The details

The Department of Trade, Industry and Competition plans to review the Automotive Production and Development Programme while excluding new semi-knocked-down operations from support. Additionally, the trade minister has ordered an investigation into the ladder-frame light commercial vehicle segment, though medium and heavy commercial vehicles remain exempt from the phase-out.

15 October 2026: The Department of Trade, Industry and Competition published the official announcement.

Roadmap

This policy shift marks a pivotal move to align South African automotive output with higher local-value requirements, moving away from simple kit-based assembly. It positions the country to compete more effectively against international hubs by favouring deep-localization manufacturing models.

Consumers may eventually see shifts in vehicle pricing and availability as manufacturers adapt to stricter local-content requirements. Car buyers can expect that the industry will prioritise models with higher domestic manufacturing participation over imported kit-based vehicles.

The takeaway

This policy signals that the government is prioritising long-term economic depth over short-term assembly speed. Local automotive firms should prepare for a transition toward higher-value manufacturing processes to maintain eligibility for state support.

What happens next

The International Trade Administration Commission is scheduled to begin a formal investigation into the ladder-frame light commercial vehicle segment following the ministerial directive.