naamsa | The Automotive Business Council welcomes the 2026 Budget Speech delivered by the Minister of Finance and notes the continued commitment to macroeconomic stability, fiscal consolidation, and infrastructure-led growth.

The stabilisation of debt, narrowing of the deficit, and introduction of a principle-based fiscal anchor are important signals to investors. Policy certainty and fiscal credibility remain foundational for long-term industrial investment, including in capital-intensive manufacturing sectors such as automotive.

Infrastructure and Logistics Reform

naamsa particularly welcomes:

• Continued reforms in logistics and rail
• Investment in SANRAL and PRASA
• Progress on border post PPPs
• The establishment of the Credit Guarantee Vehicle to unlock transmission infrastructure

Efficient ports, rail, and border infrastructure, as well as a reliable energy supply, are central to the competitiveness of South Africa’s automotive manufacturing base, which remains one of the country’s largest export industries. The infrastructure allocation exceeding R1 trillion over the medium term is therefore a positive macro-signal for industrial recovery.

Trade and Regional Integration

The emphasis on regional integration and AfCFTA implementation is aligned with the automotive sector’s long-term continental growth strategy. As a sector that exports to over 150 markets, predictable trade policy and improved cross-border facilitation remain critical.

Areas Requiring Further Policy Alignment

While the Budget makes strong reference to structural reform and growth-enhancing investment, the speech does not explicitly address the manufacturing sector or the automotive industry, despite its significant contribution to GDP, exports and employment.

Given:

• The global acceleration toward New Energy Vehicles (NEVs)
• The imbalance in the local market for Imported CBUs and Locally assembled CKDs
• Model allocation decisions currently underway globally
• The strategic role of automotive exports in South Africa’s trade balance

naamsa believes that alignment between fiscal policy, industrial policy, and the automotive transition framework is now urgent.

In particular, the sector requires:

1. Finalisation and legislative certainty on a technology-neutral NEV transition framework.
2. Clarity on incentives and transitional arrangements aligned with export markets.
3. Continued protection of industrial scale to sustain localisation and supplier development.
4. Coordination between infrastructure rollout and industrial demand corridors.

Consumer Impact

naamsa notes the fuel levy and carbon levy adjustments in line with inflation. While fiscally understandable, affordability remains a key determinant of domestic vehicle demand and fleet renewal and in this regard the consumer and entrepreneur-friendly relief is welcomed by naamsa. A stable and affordable domestic market is essential to sustain scale for local production.

The 2026 Budget reinforces macroeconomic discipline and infrastructure reform. However, the next phase of South Africa’s growth story will depend on how effectively fiscal policy aligns with sectoral industrial strategies.

The automotive industry remains ready to partner with the government to:

• Protect and grow manufacturing scale
• Enable a realistic NEV transition
• Strengthen export competitiveness
• Deepen localisation and supplier transformation

South Africa’s automotive sector is not only an industrial pillar, it is also a strategic platform for inclusive growth, technology transfer, and long-term export sustainability.