South Africa’s automotive export industry has derived very little benefit from South Africa’s admission to the BRICS economic group (Brazil, Russia, India, China and SA) in 2010.
This is the finding of a new research report released by Naamsa - The Automotive Business Council - this week.
However, in a broader sense, the formation of BRICS has most certainly enhanced South Africa’s international stature as well as its trade and economic relations with these major economic forces, the report stated.
Furthermore, the recent expansion to BRICS+, now including Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates, could help to optimise automotive supply chains within the bloc.
“By leveraging the unique strengths of each member country, BRICS+ can create more efficient and cost-effective supply chains,” Naamsa said.
“This collaboration can reduce production costs, enhance efficiency, and improve the competitiveness of BRICS+ members’ automotive exports on the global market.”
Increased imports from India, China
Interestingly, India and China have both emerged as two of the South African motor industry’s top 10 trading partners since 2010, but this is largely due to increased imports from these two countries.
Data released by Naamsa earlier this year shows that in 2023, 42% of all passenger cars sold in South Africa were imported from India, with that country’s representation increasing by 14% in just five years.
China emerged as Mzansi’s third biggest export source last year, its share growing to 9%, from just 3% in 2019. This is surely set to grow in the coming years, with the launch of numerous new Chinese brands in the country, including Jaecoo, LDV, GAC and MG.
However, Naamsa’s trade analysis shows that the BRICS members have not been substantial automotive export destinations for South Africa, especially when compared to other key partners such as the European Union and US where favourable trade agreements are in place.
Between 2010 and 2023, SA exports to India declined, and though they increased in the case of China, Brazil and Russia, these exports remain negligible in the greater scheme of things.
2023 was a record year for South African automotive exports, with 396,290 vehicles shipped abroad, to a total value of R270 billion. Europe is currently the country’s largest export destination.
“The indifferent export performance relating to BRICS countries could be attributed to broader market and economic conditions, automotive policy factors, tariff measures as well as relevant country profiles not suited to the specific premium passenger car models and bakkies manufactured in South Africa,” Naamsa said.
IOL Motoring