In 2023, the automotive trade balance remains heavily tilted in India’s favour.
India has become the top importing country of vehicles for South African automotive industries since 2013. The Automotive Business Council has said this in its BRICS+ Research Report 2024. The report said that this happened because India has been established as a global hub for small and entry-level vehicles by various brands, which account for a large share of sales in the domestic market. According to PTI news, Tata and Mahindra have firmly established their automotive products in South Africa. Mahindra officials have repeatedly confirmed that South Africa is their second home outside India due to major investments including a production line in Durban.
Participation of China and India is more
According to the report, China and India have consistently ranked as two of the top 10 trading partners of the South African automotive industry since 2010, mainly due to rising levels of automotive imports. The report said that recent entrant China has consolidated its position as the second-largest origin country for vehicle imports from 2022, as financially strapped consumers are attracted to more affordable model options in the domestic market, while the country has also become the top origin country for aftermarket parts imports since 2018.
Automotive trade balance in India’s favour
In 2023, the automotive trade balance remained heavily tilted in India’s favour, with an import-export value ratio of 97.7 to 1, compared with 56.8 to 1 with China and 2.6 to 1 with Brazil, the report said. South Africa’s entry into BRICS (Brazil, Russia, India, China and South Africa) has enhanced the country’s international stature and trade and economic ties with these major economic forces, the report said. After South Africa joined BRICS in 2010, automotive exports increased in the case of all four partner countries from 2010 to 2011, which can be attributed to the growing interest in South African automotive products at that time.
Automotive exports declined
Automotive exports declined in the case of India between 2010 and 2023, while for Brazil, China and Russia, despite showing growth, exports remained insignificant in terms of the domestic automotive industry’s total recorded export revenue of 270.8 billion rand in 2023. The report attributes the reasons for the indifferent export performance of these BRICS countries to broad market and economic conditions, automotive policy factors, tariff measures as well as the relevant country profile not being suitable for specific premium passenger car models manufactured in South Africa and the Bakkie.
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