New Delhi, Oct 26 (NationPress) The Indian automobile sector is poised for significant growth in South Africa, with multiple firms planning to elevate their current assembly operations into comprehensive manufacturing facilities and establish new plants. This initiative aligns with South Africa's efforts to draw major global automotive players to bolster its domestic automobile market, as reported by News South Africa.

South African Minister of Trade, Industry, and Competition, Parks Tau, highlighted that both Indian and Chinese automotive companies have shown interest in amplifying their investments in the region.

Minister Tau has been engaging in discussions with various automakers as part of the government’s strategy to rejuvenate the local auto industry, which is grappling with challenges such as declining export demand, heightened competition from lower-cost imports, and infrastructure hurdles.

The South African automobile sector has faced significant pressure due to dwindling exports, particularly following tariff impositions by the United States.

Moreover, a proposed ban by the European Union on internal combustion engine vehicles poses an additional threat to the country’s export markets.

This scenario has led the government to pivot towards new energy vehicles (NEVs) and attract investments in electric mobility.

Minister Tau expressed that investors from India and China are eager to collaborate with existing automotive manufacturers in South Africa, leveraging excess manufacturing capacity as well as establishing new plants.

He pointed out that firms currently operating in the semi-knocked-down (SKD) format are committed to advancing to complete-knocked-down (CKD) production, which entails full-scale local manufacturing.

The South African government is also in negotiations with global giants such as Toyota and Ford to ensure the sustainability of its automobile sector.

The discussions are centered on addressing issues like declining production volumes, competition from China, tariff volatility, and the expensive shift towards electric vehicles.

Among Indian companies, Mahindra has confirmed its intention to transition from SKD to CKD production in South Africa to enhance local manufacturing and create a regional hub for automotive exports.

The firm has also expressed interest in setting up electric vehicle (EV) assembly plants in Durban, backed by the South African government’s initiatives to cultivate a robust manufacturing ecosystem.

In addition, Tata Motors, which ceased exports to the African market in 2017, is making a comeback through a collaboration with Motus Holdings Limited -- the largest passenger vehicle retailer in South Africa -- to distribute its vehicles.