New Delhi, Oct 26 (IANS) India’s automobile industry is set to expand its presence in South Africa, as several companies plan to upgrade their existing assembly operations into full-fledged manufacturing units and set up new plants.

The move comes amid South Africa’s push to attract major global automakers to invest and strengthen its local automobile sector, News South Africa reported.

According to South African Trade, Industry and Competition Minister Parks Tau, Indian and Chinese automakers have expressed interest in increasing their investments in the country.

Tau has been in talks with several automakers as part of the government’s strategy to revive the local auto industry, which faces multiple challenges such as falling export demand, rising competition from cheaper imports, and infrastructure issues.

The South African auto industry has been under pressure due to declining exports, especially after the United States imposed tariffs.

Additionally, a proposed European Union ban on internal combustion engine vehicles has further threatened the country’s export markets.

This has prompted the government to shift focus towards new energy vehicles (NEVs) and attract investments in electric mobility.

Minister Tau said that Indian and Chinese investors are keen to collaborate with existing automakers in South Africa, both by using excess manufacturing capacity and by establishing new factories.

He noted that companies currently operating in semi-knocked-down (SKD) format have committed to transitioning to complete-knocked-down (CKD) manufacturing, which involves full-scale local production.

The South African government is also holding discussions with global automakers like Toyota and Ford to safeguard the future of its automobile industry.

The talks are focused on tackling issues like declining production volumes, competition from China, tariff uncertainties, and the costly transition to electric vehicles.

Among the Indian players, Mahindra has confirmed its plan to upgrade from SKD to CKD production in South Africa to boost local manufacturing and create a regional hub for automotive exports.

The company has also shown interest in establishing electric vehicle (EV) assembly facilities in Durban, supported by the South African government’s initiatives to build a strong manufacturing base.

Meanwhile, Tata Motors, which had halted exports to the African market in 2017, is making a comeback through a partnership with Motus Holdings Limited — South Africa’s largest passenger vehicle retailer — to distribute its vehicles.

–IANS

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