South Africa, Algeria, And Egypt In Talks To Strengthen Automotive Industry

The Department of Trade, Industry and Competition (DTIC) has begun talks with Algeria and Egypt to explore cooperation in the automotive sector.

Minister of Trade, Industry and Competition Parks Tau, currently in Algeria for the fourth Intra-African Trade Fair, is leading a delegation of 30 South African businesses.

The goal is to deepen trade relations and strengthen South Africa’s auto industry, which has been hit by rising job cuts, cheap imports, and tariffs on exports to the US.

Proposed Agreement to Boost Production and Market Access

As part of the discussions, a crosscutting Memorandum of Understanding (MOU) is on the table to drive joint initiatives. Tau explained:

“We’re also reaching out to other automotive manufacturing countries, but we thought it’s important that we start there. And that would include cooperating on areas where we would be able to build component manufacturing capabilities in Algeria, we would be able to consolidate. And the extent to which we create production that is able to access the African market, but also the export market.”

Tau emphasized the importance of cooperation over competition:

“And the extent to which we can complement each other, because sometimes we tend to compete amongst each other when in fact there are greater opportunities in identifying where we have complementarities and cooperation.”

South Africa’s Push for Localisation and Industry Growth

At home, government’s key objective is to raise local content in vehicle manufacturing to 65%, up from the current average of around 40%. Tau highlighted the need to strike a balance between assembly and manufacturing across African countries:

“We do intend to ensure that we’re able to increase that level of localisation. Now the problem is industry in South Africa and other countries that are auto manufacturers say, look, if we have a situation where sister countries assemble instead of manufacture, you make it less competitive for the local industry.

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“It undermines our component sector. So we need to find agreement on those issues and that’s what the negotiations are about.”

This round of talks follows last year’s state visit to Algeria, during which multiple agreements were signed, including one on economic cooperation.

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