SOUTH AFRICA · MOTORING
Key Facts
- —What is happening South Africa plans to phase out semi-knocked-down (SKD) car assembly, where plants import near-complete kits, and will give no policy support to new SKD plants, Trade Minister Parks Tau announced on Thursday, 15 October 2026.
- —Why it matters The move points carmakers towards complete knock-down (CKD) manufacturing, whose legal definition the government will tighten, while the sector’s incentives are under review and the national Automotive Master Plan targets 60% local content by 2035.
- —The numbers The Automotive Master Plan 2035 aims for 60% local content, double the sector’s employment and 1% of global vehicle output, but no phase-out date, SKD volume or job count has been given for the change.
- —Who is who Parks Tau leads the Department of Trade, Industry and Competition (the dtic); ITAC, the International Trade Administration Commission, recommends tariff changes to the minister; naamsa is the automotive industry body and Naacam represents component makers.
- —What to watch ITAC is to be instructed to investigate whether ladder-frame pickups need more protection, and the review of the Automotive Production and Development Programme continues, but no deadline or phase-out date has been set.
- —What it means for you US carmaker Ford builds the Ranger pickup near Pretoria, in the segment ITAC is to investigate, but nothing published says Ford is affected, and the announcement does not concern visitors.
South Africa plans to phase out plants that assemble imported car kits, the trade minister announced on Thursday. New kit plants will get no policy support, as the government works to tighten the legal definition of local manufacturing.
South Africa plans to phase out kit car plants, which assemble vehicles from imported semi-knocked-down (SKD) kits. Trade Minister Parks Tau announced the change on Thursday, 15 October 2026.
No new SKD plant will receive policy support, and medium and heavy commercial vehicles are excluded. For US readers, Michigan-based Ford builds its Ranger pickup near Pretoria, but no source says the announcement affects Ford.
What the Kit Car Plants Decision Says
The announcement came at South African Auto Week in Durban, on the first day of the KwaZulu-Natal Investment Conference. Tau spoke at the International Convention Centre on behalf of President Cyril Ramaphosa, the dtic’s statement shows.
The Department of Trade, Industry and Competition (dtic), which Tau leads, published the speech on its website on 15 October. Its headline reads “Minister Tau Announces end of Semi-Knock-Down Operations in SA’s Automotive Sector”.
SKD assembly means importing vehicle bodies and most components in kit form and putting them together locally. TimesLIVE and TechCentral, both republishing a Reuters report, give that definition.
Complete knock-down (CKD) manufacturing assembles vehicles from individual components. The government says it will strengthen the legal definition of CKD manufacturing.
Tau will instruct the International Trade Administration Commission (ITAC), which recommends tariff changes, to investigate the ladder-frame light commercial vehicle segment. That segment includes pickups, known in South Africa as bakkies.
ITAC will then make a final determination on whether the segment needs more support. Tau said any extra protection should come with reciprocal commitments on production, localisation, employment, transformation, exports and investment.
Why Carmakers Wanted Kit Assembly Curbed
BMW Group South Africa chief executive Peter van Binsbergen said in January that SKD makers come in “close to duty-free”. Business Report quoted him saying they use aftermarket categories, without creating investments and hardly creating jobs.
Toyota South Africa Motors chief executive Andrew Kirby asked for a timeframe for SKD plants to switch to CKD or close. Business Times reported his request on 28 February.
Kirby also said CKD investments “shouldn’t be placed at risk by light-touch assembly production”. He warned that more SKD plants could start up and further undermine the existing plants.
Business Times named Mahindra in Durban and BAIC in Gqeberha as light-vehicle SKD operations in February, and neither responded immediately. Thursday’s statement and wire reports name no plants, so the list of affected plants is not confirmed.
The Master Plan and the Incentive Review
The government says the Automotive Production and Development Programme (APDP2), the sector’s incentive framework, is under review. It is working on the review with naamsa, the Automotive Business Council, the component makers’ body Naacam and organised labour.
The South African Automotive Master Plan 2035 sets the long-term goals, a government statement of 23 November 2018 shows. It aims for 60% local content in South African-assembled vehicles and to double employment across the automotive value chain.
It also targets 1% of global vehicle output by 2035. Thursday’s statement does not mention these targets, and no source says how many vehicles SKD plants build.
The same dtic statement says work has begun on an End of Life Vehicle policy. It adds South Africans bought almost as many new energy vehicles in the first seven months as in all of last year.
What It Means for US Readers
Ford, the Michigan-based carmaker, builds the Ranger pickup at its Silverton plant near Pretoria. Ford’s March 2025 post says the plant can build about 200,000 vehicles a year and the Ranger reaches over 100 markets.
The planned ITAC study will cover pickups, but no source says Ford, or any other named company, is affected. Neither the dtic nor the reports say whether any US-owned plant uses SKD assembly.
For US investors, this is industrial policy, not a company result. Neither the dtic nor the reports give a financial estimate of the change.
For travellers and US expatriates, nothing in the announcement concerns visas, travel advice or road rules. Any effect would come later through the range and prices of locally assembled vehicles, which no source has estimated.
What Is Not Known
No date has been given for ending existing SKD operations. The dtic text gives no deadline for the ITAC investigation or for the review of the incentive programme.
The statement does not name the plants affected. The two plant names from Business Times are not confirmed by the dtic.
The exact scope of the exclusion for medium and heavy commercial vehicles is not spelled out. The dtic text also gives no detail on how the CKD definition will change.
No source gives SKD job numbers, vehicle volumes from kits or the value of the support that will end. Neither the dtic nor the reports mention the United States, US tariffs or US trade policy.
No current local-content average is confirmed. The plan gives 39% for 2015, and the 38% in a wire report is not in the plan.
What Comes Next
ITAC will investigate the ladder-frame light commercial vehicle segment once Tau instructs it, and a final determination will follow. No start date or deadline has been published.
The incentive programme review continues with industry and unions, and the dtic says it will strengthen the legal definition of CKD. A phase-out date for existing SKD plants would show how quickly carmakers must change.
Frequently Asked Questions
What is a kit car plant in South Africa?
It is an SKD plant that imports vehicle bodies and most components in kit form and assembles them locally. CKD plants instead assemble vehicles from individual components.
What did Parks Tau announce on 15 October?
He said South Africa plans to phase out current SKD operations and will give no policy support to new SKD facilities. He also said he will instruct ITAC to investigate the ladder-frame segment, which includes pickups.
Does the change affect trucks?
No, medium and heavy commercial vehicles are excluded, the dtic says. Pickups fall in the light commercial segment that ITAC is to study.
When does the phase-out start?
No date has been published. The dtic statement gives no deadline for the phase-out, the ITAC study or the incentive review.
Why does this matter to US readers?
US carmaker Ford builds its Ranger pickup near Pretoria, and pickups fall in the segment ITAC is to study. No source says Ford is affected.
Sources: Department of Trade, Industry and Competition, 15 October 2026; TimesLIVE, 15 October 2026; TechCentral, 15 October 2026; Business Times, 28 February 2026; Ford, 26 March 2025; Ford, Silverton Assembly Plant; Business Report, 28 January 2026; Department of Trade and Industry, 23 November 2018 (all accessed 16 October 2026).
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief
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