Johannesburg, India, has become the top source country for the South African automotive industry's vehicle imports since 2013, says the Automotive Business Council in its BRICS+ 2024 Research Report.
This is because several brands have established India as the global hub for small and entry-level vehicles that account for the bulk of sales in the domestic market, the report said.
Tata and Mahindra have firmly established their automotive products in South Africa. Mahindra executives have even repeatedly reaffirmed that South Africa is their “second home” outside of India due to significant investments, including a production line in Durban.
China and India have consistently ranked as two of the South African automotive industry's top 10 trading partners since 2010, mainly due to the rising level of automobile imports.
The newest entrant, China, has cemented its position as the second-largest source country for vehicle imports from 2022, as financially strapped consumers gravitated toward more affordable model options in the domestic market, while the country also has become the main country of origin for spare parts. imports since 2018, according to the report.
“In 2023, the automotive trade balance remained heavily skewed in favor of India with the ratio of the value of imports to exports at 97.7 to 1, China at 56.8 to 1 and Brazil at 2.6 to 1. ”says the report. identified the need for BRICS nations to explore complementarities, share experiences and promote capacity development in automotive trade and related investment issues.
The report said South Africa's admission into the BRICS (Brazil, Russia, India, China and South Africa) had improved the country's international stature and trade and economic relations with these major economic forces.
After South Africa joined the BRICS in 2010, automobile exports increased for all four partner countries between 2010 and 2011, which could be attributed to the increased interest in South African automotive products at that time.
However, between 2010 and 2023 automobile exports decreased for India, while for Brazil, China and Russia, despite reflecting increases, exports remained insignificant in the context of export earnings. Record domestic auto industry totals of Rand 270.8 billion in 2023.
The report cited the reasons for this “indifferent export performance in relation to the BRICS countries as broader economic and market conditions, automotive policy factors, tariff measures, as well as relevant national profiles that are not tailored to specific car models. premium passenger cars and South African-made bakkies. ”.
"When it comes to car imports, solid increases were recorded from all four countries in South Africa between 2010 and 2011. Over the period from 2010 to 2023, car imports from China, India and Brazil increased by significant margins," said.
The report shares the opportunities that would arise for South Africa from the admission of five more countries to the BRICS+ bloc from January 2024.
“The group's expansion to BRICS+ from January 1, 2024, including other major emerging economies, promises to reshape several global industries, including the automotive sector.
“The integration of new member countries could optimize automotive supply chains within BRICS+. "The BRICS attract a diverse group of potential members because of their shared desire, driven by primaries, to create a more equitable global landscape that many countries believe is currently biased against them," the report says.
This is because several brands have established India as the global hub for small and entry-level vehicles that account for the bulk of sales in the domestic market, the report said.
Tata and Mahindra have firmly established their automotive products in South Africa. Mahindra executives have even repeatedly reaffirmed that South Africa is their “second home” outside of India due to significant investments, including a production line in Durban.
China and India have consistently ranked as two of the South African automotive industry's top 10 trading partners since 2010, mainly due to the rising level of automobile imports.
The newest entrant, China, has cemented its position as the second-largest source country for vehicle imports from 2022, as financially strapped consumers gravitated toward more affordable model options in the domestic market, while the country also has become the main country of origin for spare parts. imports since 2018, according to the report.
“In 2023, the automotive trade balance remained heavily skewed in favor of India with the ratio of the value of imports to exports at 97.7 to 1, China at 56.8 to 1 and Brazil at 2.6 to 1. ”says the report. identified the need for BRICS nations to explore complementarities, share experiences and promote capacity development in automotive trade and related investment issues.
The report said South Africa's admission into the BRICS (Brazil, Russia, India, China and South Africa) had improved the country's international stature and trade and economic relations with these major economic forces.
After South Africa joined the BRICS in 2010, automobile exports increased for all four partner countries between 2010 and 2011, which could be attributed to the increased interest in South African automotive products at that time.
However, between 2010 and 2023 automobile exports decreased for India, while for Brazil, China and Russia, despite reflecting increases, exports remained insignificant in the context of export earnings. Record domestic auto industry totals of Rand 270.8 billion in 2023.
The report cited the reasons for this “indifferent export performance in relation to the BRICS countries as broader economic and market conditions, automotive policy factors, tariff measures, as well as relevant national profiles that are not tailored to specific car models. premium passenger cars and South African-made bakkies. ”.
"When it comes to car imports, solid increases were recorded from all four countries in South Africa between 2010 and 2011. Over the period from 2010 to 2023, car imports from China, India and Brazil increased by significant margins," said.
The report shares the opportunities that would arise for South Africa from the admission of five more countries to the BRICS+ bloc from January 2024.
“The group's expansion to BRICS+ from January 1, 2024, including other major emerging economies, promises to reshape several global industries, including the automotive sector.
“The integration of new member countries could optimize automotive supply chains within BRICS+. "The BRICS attract a diverse group of potential members because of their shared desire, driven by primaries, to create a more equitable global landscape that many countries believe is currently biased against them," the report says.
