Automotives and Rail



South Africa hosts by far the largest automotive industry in Africa, producing more than 500 000 vehicles a year and attracting high levels of FDI from seven leading car and truck makers in the world and numerous component manufacturers.

Value proposition

The country’s continued car and truck assembly is no accident. Tailor-made support programmes for developing the automotive industry have been in place for many decades, such as the Automotive Production and Development Programme (APDP).


South Africa’s automotive and components industry is perfectly placed for investment opportunities. The automotive industry is the country’s largest manufacturing sector. Vehicle manufacturers such as BMW, Ford, Volkswagen, Nissan, Daimler-Chrysler, Toyota and FAW have production plants in the country. Several component manufacturers have also established production bases.

Opportunities for expansion or new capacity abound, particularly in the components industry. Integration into the global supply chains of multinational OEMs located in, and operating from South Africa, can unlock growth opportunities. Investment openings lie in export-oriented sub-sectors as well as for import replacement.


The railway network in South Africa is the preserve of State-Owned Transnet’s freight rail and a separate State-Owned Company, the Passenger Rail Agency of South Africa (PRASA). Transnet operates trains carrying freight, especially coal and iron ore, and has its own engineering division. PRASA is responsible for most of the passenger rail services in the country, including the Metrorail, services which operate in urban areas. Both entities have undertaken ambitious investment programmes.

Value proposition

Investment of billions of rand in procuring new locomotives, rolling stock, rail infrastructure such as signalling equipment has already been made by the two rail companies and will continue to be made, opening up opportunities in local manufacturing supply.



Among Transnet’s big investments is the acquisition of locomotives to modernise its fleet in anticipation of a rise in general freight volumes and for the strategy of moving more freight from road to rail. At the end of March 2018, cumulative spending towards procuring the targeted 1 064 locomotives amounted to just over R30 billion.

Government has also devoted increased investment since 2012 to enable PRASA to implement a modernisation programme anchored by the Rolling Stock Fleet Renewal, National Signalling Upgrade and Strategic Infrastructure Investment.

The Rolling Stock Fleet Renewal programme is a catalyst for the transformation of Metrorail services in particular and public transport in general. The project aims to achieve key government objectives, including revitalising South Africa’s rail engineering industry through local manufacturing and ensuring local content.

An example of the opportunities is the R1 billion Gibela consortium factory in Ekurhuleni, majority owned by Alstom. Gibela is tasked with replacing PRASA’s ageing metro fleet with 3 600 modern commuter passenger trains over 10 years from 2015, amounting to R51 billion. Other examples are Morgan Advanced Materials (electric carbon components); ABB Modderfontein (traction transformer factory); Electro-Inductive Industries/Siemens (transformers); Lucchini (railway forged wheels); Timken (train wheel bearings); Transnet Engineering (the SA-designed Trans-Africa Locomotive); Koedoespoort assembly plant (locomotive assembly for Transnet Freight Rail and General Electric); Bombardier Transportation South Africa (BT); and CRRC Dalian locomotive and rolling stock.

Apart from import replacement on passenger and special purpose coaches, locomotives and other infrastructure, export growth and metal fabrication opportunities lie in rail-tracks and slipways, locomotives and components, electrical cables and overhead transmission lines, and pylons.