AUTOFORUM

AI and automation are reinventing South Africa’s auto component sector

Jul 31, 2025 National Association of Automotive Component and Allied Manufacturers (NAACAM), Renai Moothilal, Automation, digitisation

AI and automation are reinventing South Africa’s auto component sector

A cornerstone of South Africa’s industrial economy, the automotive sector produces around 600,000 vehicles a year. It’s also a major employer: while vehicle manufacturing directly supports about 33,000 jobs, the real engine of employment lies in the component sector, which sustains more than 80,000. When factoring in downstream roles in logistics, retail, and supply chain operations, and upstream materials supply, the sector supports approximately 500 000 livelihoods and remains one of the country’s most significant and valuable export drivers.

The industry faces mounting pressure from trade risks, subdued domestic demand, and ongoing macroeconomic strain, while unstable energy, water supply disruptions and logistics bottlenecks erode thin margins. Exports are also under strain. 2024 year-end data reveals that automotive component exports fell by R 3.5 billion last year, even before the threat of new US tariffs became a concern.

National Association of Automotive Component and Allied Manufacturers (NAACAM) CEO, Renai Moothilal, says that, in an industry where every manufacturing job supports multiple dependents, the loss of even a single job reverberates through families, communities, and the wider economy. ‘This is the environment where digital technologies, automation, and AI must now prove their value by offering practical, near-term solutions to help manufacturers stay competitive. Not as blue-sky innovations, but as real tools to help South African suppliers survive, adapt, and grow in the face of local and global headwinds.’

Original-equipment manufacturers (OEMs) are not standing still. While they ramp up hybrid electric vehicle programmes and digitise their supply chains, greater traceability, tighter tolerances, and seamless integration are now prerequisites so the demands on South African suppliers are greater than ever. Meeting these demands requires more than just competitive pricing or the ability to increase capacity: they need smarter, more adaptable systems and leaner production methods that drive efficiency – without sacrificing jobs in the process. These tools are already in play. Machine learning models can support predictive maintenance, alerting teams to potential failures before they cause downtime. Computer vision can flag orientation errors or defects in real time. IoT sensors and digital twins allow manufacturers to monitor and simulate performance across facilities, even with limited engineering teams on site.

One South African exporter, which has grown too, now also operate in India, Germany, and the US, designs turnkey assembly systems for global OEMs, while working with a highly unionised workforce at home. Their success shows that automation doesn’t have to come at the cost of jobs or worker protections. It can, in fact, be part of a more resilient industrial base. ‘AI isn’t about replacing people; it’s about removing the barriers that prevent more people from participating,’ says Yanesh Naidoo, Jendamark’s owner and executive innovations director. ‘If we use AI to lower the skill threshold for complex tasks, we can enable semi-skilled operators to do high-precision work and bring more people into meaningful manufacturing roles.’

For smaller businesses, the challenge is access to tools and the know-how needed to deploy them. Here, too, things are changing. Modular AI tools, low-cost sensors, and cloud-based analytics platforms are lowering the barriers to entry. SMEs no longer need a full-scale smart factory to participate in digital manufacturing. They need practical, phased adoption strategies focused on solving real problems such as rework, delays, defects, and training bottlenecks.

‘In our context, digitisation is often more powerful than automation,’ says Naidoo. ‘Automation removes people from the process. Digitisation makes people more efficient. It’s a critical distinction, especially in a country where human capital is one of our biggest assets.’ Such strategies are increasingly important because component plants across the country have faced closures for a multitude of reasons, including assembler partners lowering volume outlooks. The result: scuttled capacity, job losses, and a loss of confidence in local capability. Digital tools can help mitigate this risk by making operations more flexible, responsive, and data-driven, and thus better able to shift output, integrate into changing supply chains, and pursue new customer segments.

They also open the door to new opportunities. The government has launched tax incentives to stimulate electric vehicle assembly, whilst NEV components, battery production, and other new technology localisation is lined up for a basket of incentives including additional cash rebates, and duty related mechanisms. President Cyril Ramaphosa is pushing for SA to be ready to become a global player in building new-energy vehicles. Chinese OEMs are entering the market with new-energy vehicles, exploring local sourcing. Aftermarket sales climb as vehicle fleets age, and the right to repair policy is unlocking opportunities for independent suppliers and township-based workshops.

‘Automation alone won’t transform the sector,’ says Moothilal. ‘What matters is how we use digital tools to empower people. We need to deploy technologies that raise capabilities, not reduce headcount.’ Clearly, the most practical application of AI in this context is not in replacing workers but augmenting them. Guided operator systems help semi-skilled workers perform complex tasks accurately. Predictive models cut down on manual inspection, while real-time dashboards enable proactive oversight. This shortens training, boosts consistency, and improves auditability – all of which are critical for global buyers.

‘Too often, businesses chase technology for its own sake. What we’ve learned is that customers don’t want innovation; they just want problems solved,’ says Naidoo.

As export markets evolve, these capabilities will become even more important. South Africa’s dependence on a few concentrated trade partners leaves the sector exposed. To stay viable, the industry must diversify markets and prove its ability to deliver quality, flexibility, and digital compliance. It needs smarter investment in digital skills, technician training, and systems integration, and manufacturers must find ways to leapfrog the legacy stages of industrial development by using technology to close the performance gap.

“The key is knowing where to start,” says Moothilal. “You don’t need to digitise everything at once. You need to solve the first problem – and build momentum from there.” The fundamentals are there: a skilled base, a proven export track record, and a sector that already understands the importance of global integration. What’s needed now is coordinated action from manufacturers, the government and industry bodies to expand what’s working, and support areas that are still catching up.

The upcoming NAACAM SHOW 2025 is the moment to spotlight digital trailblazers, tackle supply chain roadblocks, and accelerate local manufacturing. If AI and automation are to fulfil their promise, they must strengthen — not shrink — South Africa’s industrial base. In a tougher global market, the edge will go to those who fuse tech with inclusion, speed with credibility. South Africa has what it takes — not just to compete, but to lead.

For more information on the NAACAM SHOW 2025 or to book your seat please visit

https://naacam.org.za/naacam-show-2025/.