Can you provide a background of the Automotive Industry Transformation Fund (AITF) and explain its core mandate?
The Automotive Industry Transformation Fund (AITF) was established in 2020 by seven multinational original equipment manufacturers (OEMs) operating in South Africa: BMW Group South Africa, Ford Motor Company of Southern Africa, Isuzu Motors South Africa, Mercedes-Benz South Africa, Nissan South Africa, Toyota South Africa Motors and Volkswagen Group Africa.
The founding companies recognised that meaningful transformation required a coordinated, industry-wide mechanism capable of combining developmental funding, market opportunities and capacity-building support for qualifying black-owned businesses across the automotive value chain.
The AITF’s core mandate is therefore to accelerate black industrialist participation, deepen localisation and strengthen the competitiveness of the South African automotive supplier base.
What have been the AITF’s key achievements to date?
Since inception the AITF has invested more than R900-million, supporting over 90 black-owned businesses across components manufacturing, logistics, dealerships, services and related activities.
More than 30% of that funding has been directed to women-owned enterprises as part of an intentional effort to bring a gender lens to sector initiatives.
These investments have helped create and retain over 4 000 jobs. Beneficiaries have secured significant long-term market access quantified in the billions of rands worth of contracted work. The organisation is on track to support more black-owned enterprises, underpinned by a further R1-billion in targeted investment by 2029.
What practical solutions and support does the AITF offer to businesses in the automotive sector and the sector as a whole?
The AITF sits at the nexus of transformation, inclusivity and competitiveness. It provides a combination of financial and non-financial support designed around the realities of the industry.
For qualifying black-owned businesses (at least 51% black-owned) operating in the automotive value chain, the organisation offers developmental-funding solutions that include loans, equity or equity-like instruments, grants and other blended structures. Funding can be used for business acquisitions, working capital, capital expenditure, product development or commercialisation.
Equally important is market access. The AITF works with the OEMs and, increasingly, Tier 1 suppliers to open procurement pathways. This is complemented by capacity-development interventions – training, mentorship, operational upgrading and business-development support to ensure ongoing sustainability of the entities supported by AITF. Through the Automotive Supply Chain Competitiveness Initiative (ASCCI), the Fund also helps Tier 2 and Tier 3 suppliers improve operational capability (competitiveness) and localisation outcomes.
For OEM and Tier 1 participants (including new entrants) in the South African automotive sector, the AITF provides an established, compliant and scalable solution to maximise transformation and localisation impact.
For the industry at large, the AITF’s role as the primary sector mechanism for driving industry initiatives allows impact at scale. Funding alone cannot address the challenges faced by entrepreneurs and industrialists; the combination of capital, market access and capability support forms a more complete ecosystem.
What differentiates the AITF from other funding or development initiatives, and how has the organisation evolved since its establishment?
Three elements stand out. First, the direct linkage between funding and OEM/Tier 1 market access – capital is not provided in isolation; it is structured around real commercial opportunities. Second, the collective ownership and governance by the seven OEMs gives the Fund both scale and industry insight that a purely public or purely private fund would struggle to match. Third, the organisation has deliberately evolved beyond a pure compliance vehicle into a competitiveness catalyst.
This evolution is captured in our BOOST strategy – Build, Operate, Orientate, Solve and Transform. The AITF started by building solid foundations for the Equity Equivalent Investment Programme and now actively helps the sector solve structural challenges
and drives transformation that improves global competitiveness.
Over the past six years the organisation has taken on additional mandates that leverage its position and capabilities:
- APDP 2 Transformation Fund – a pathway for component and tooling manufacturers to deepen to localisation and transformation at lower tiers.
- Management of the Automotive Supply Chain Competitiveness Initiative (ASCCI) – supporting local suppliers to become competitive at a global level.
- Secretariat of the Automotive Executive Oversight Committee (EOC) – providing central supporting strategic decision making for the EOC.
- SAAM Delivery Office (SDO) – a focused implementation function that ensures the successful delivery of of SAAM 2035 priorities, initiatives and strategic objectives. priorities, initiatives and strategic objectives
How does the AITF assess the current state of South Africa’s automotive industry? What are the main challenges and opportunities for local businesses?
South Africa’s automotive industry remains the most developed automotive manufacturing ecosystem on the African continent, supported by established OEMs, export experience, industrial infrastructure and a significant supplier base. It continues to be a cornerstone of manufacturing. At the same time, the sector is operating at a defining point and faces structural headwinds.
Key challenges include:
- Local content in vehicles assembled in South Africa is still hovering just under 40%, against a SAAM 2035 target of 60%.
- The contribution of black industrialists, measured by gross value addition is still far below the 25% target by 2035.
- Production volumes have not grown at the rates originally envisaged, which constrains the commercial case for deeper localisation.
- Logistics constraints, energy costs, skills shortages and modest domestic-market growth add further pressure.
The global transition towards new-energy vehicles (NEVs) presents both risk and opportunity. South Africa exports vehicles to markets that are progressively adopting stricter emissions regulations and electrified mobility. The country must develop
the policy certainty, infrastructure, skills and component capabilities required to participate.
The rapid growth of new automotive brands is reshaping the domestic market. Their investment and potential localisation could introduce new production volumes, technology and supplier opportunities – provided policy ensures that new entrants contribute meaningfully to local manufacturing, employment, supplier development and transformation.
Significant opportunities exist in:
- Tier 2 and Tier 3 supplier development and the localisation of higher-value components.
- The NEV transition – components, charging infrastructure, battery-related activities and materials beneficiation.
- Regional markets under the African Continental Free Trade Area (AfCFTA), positioning South Africa as an automotive hub serving the continent.
- The deliberate development of black industrialists which can simultaneously advance transformation and expand the competitive supplier base.
When these opportunities are pursued in a coordinated way aligned with SAAM 2035, the industry can strengthen both its inclusivity and its global positioning.
As you have noted, the industry appears to be tracking behind some of the stated SAAM 2035 objectives. What role is the AITF playing in the review and implementation of SAAM 2035?
The AITF serves as the Secretariat to the South African Automotive Masterplan Executive Oversight Committee (EOC) and supports implementation through a dedicated SAAM Delivery Office.
Its responsibility is to help coordinate the implementation of SAAM 2035, track progress against agreed objectives, identify delivery constraints and provide evidence-based
recommendations to the EOC, which is chaired by the Minister of Trade, Industry and Competition.
The Delivery Office supports work across the Masterplan’s key pillars, including localisation, transformation, regional market development, skills, infrastructure, technology, competitiveness and new-energy vehicle readiness.
This role is important because the automotive industry does not lack strategic ambition. The principal challenge is translating policy commitments into coordinated, measurable and time-bound implementation. The AITF therefore brings together the necessary stakeholders, establishes appropriate implementation resources, monitors delivery and helps ensure accountability for agreed interventions.
Its wider role is to convert the strategic objectives of SAAM 2035 into tangible industrial outcomes – increased local content, stronger suppliers, greater black participation, employment creation and improved global competitiveness. In short, the AITF acts as a practical enabler and coordinator that helps translate high-level ambitions into executable projects and measurable progress on the ground.
Contact
- Email: info@autofund.co.za
- Website: www.autofund.co.za
