Luthando Kolisi jokes about it, but there’s nothing funny in his voice. He says if he finds work at another factory, it will probably end up shutting down. That’s how he lost his last two jobs. The first factory closed. Then Goodyear shut its doors. Now he sits at home, sending out applications that disappear into the void, taking whatever odd jobs he can find to keep food on the table.
“I’m slowly beginning to lose that hope,” he says.
His story is written across thousands of faces in Nelson Mandela Bay. This coastal city, once proudly called the Detroit of South Africa, is bleeding jobs at a rate that alarms everyone who watches the numbers. Official statistics show the municipality lost 41,000 jobs last year. Among all of South Africa’s metro regions, Nelson Mandela Bay recorded the steepest jump in joblessnessmore than 28% of people out of work in the final quarter, up from less than 22% just a year before.
The auto sector made this city. Now it’s breaking it apart.
The Heart of an Industry Under Siege
Nelson Mandela Bay sits at the centre of South Africa’s automotive industry. The sector makes up the biggest share of the country’s manufacturing. Its contribution to economic output rivals that of mining. But that engine is sputtering, choked by rising costs and a flood of cheaper imports from India and China that shows no signs of slowing.
The numbers tell a brutal story. A decade ago, nine of the top ten selling vehicles in South Africa were built locally. Now fewer than one in three are. Suzuki, which imports most of its models from India, is the second-largest seller of cars in the country. Chery, from China, only entered the market in 2021, but last year it displaced Volkswagen as the country’s third-biggest car company.
China’s rise as the world’s largest car exporter has been powered by massive overcapacity at home. That means Chinese automakers compete with South African manufacturers both in the local market and abroad, where around two-thirds of South African-made cars are sold.
According to Bloomberg Economics, China’s share of car imports by volume climbed to 27% last year from 21% in 2024. For trucks, it rose to around 50% from nearly 30%. The price of imported cars fell 4.5% in 2025. For local manufacturers already struggling with high costs, it’s a perfect storm.
The View From the Factory Floor
From his office overlooking the centre of Nelson Mandela Bay, Mziyanda Twani, a local leader of the National Union of Metalworkers of South Africa, sees the decline every day. Without drastic action to save the industry, he warns, “this area is soon going to be defined as a ghost town.”
The half-hour drive to Volkswagen’s factory northwest of the city reveals why. Mangled roadside barriers guard decaying colonial-era buildings with peeling paint and rusted roofs. It’s a landscape of industrial abandonment.
Volkswagen has been in South Africa since 1951. It built the beloved CitiGolf, a model unique to this country. Today it produces Polos for markets across the globe at its Kariega plant on the city’s outskirts. But Martina Biene, chair of Volkswagen Group Africa, describes the coming months as a “make-or-break year” for the company’s local operations.
VW directly employs around 4,000 people in South Africa. In the coming weeks, it must decide whether to make a large investment in the plant to produce a new light pick-up truck. That investment would keep the line running into the next decade. But Biene says the current economic and policy environments don’t justify proceeding.
“We get beaten up by the imports, mainly from India and China,” she explains. “Which is not a train smash if the playing field would be level.”
It’s not. Local labour costs are twice what they are in India, where Maruti Suzuki’s vast facilities produce four times more vehicles in a year than South Africa’s entire industry combined. Infrastructure and logistics costs pile on top. Energy remains expensive despite some stabilisation in power supply. Municipal water and electricity networks are crumbling after decades of under-investment.
The Exodus Begins
Goodyear’s closure in July last year was a body blow. When management called more than 900 workers to a meeting, Kolisi suspected something was wrong. He arrived five minutes late to find the crowd already streaming out. More than 100 security officers, police, and ambulances had been deployed. “They were preparing for something,” he says. The factory was closing.
He wasn’t the only one affected. Ford has cut 470 jobs at its factories in Silverton and Nelson Mandela Bay. Mercedes-Benz, which exports the C-Class from East London to the US, has shed 700 workers and is looking to share its factory with another brand. Nissan announced it will cease local manufacturing in June after more than 60 years, selling its facilities to Chery.
Stellantis, which planned to build a Peugeot-branded pick-up truck in Nelson Mandela Bay, has paused those plans. A Continental tire factory nearby has warned labour leaders it may be forced to close if operations don’t improve. The company will only say it “continuously reviews its operations to ensure long-term sustainability and competitiveness in a currently challenging operating environment.”
The Infrastructure Crush
State-owned port and rail infrastructure have improved marginally for bulk raw material exporters, but those improvements haven’t reached carmakers. Ford’s plant in Silverton, Pretoria, sits 600 kilometres from its nearest export terminal. CEO Neale Hill says it’s still cheaper to truck vehicles than put them on rail. The cost difference is $37 per vehicle, and at the plant’s capacity of 200,000 units a year, “it adds up.”
Several automotive CEOs told Bloomberg they need better governance at Transnet, the state-owned logistics giant. They want private investment into port, rail, and electricity infrastructure sped up. They’re asking for policy changes: reforms to a manufacturing voucher system, tax changes on new car purchases, an end to state support for basic assembly operations that employ far fewer workers, and Black Economic Empowerment regulations that apply equally to importers and manufacturers.
The Policy Puzzle
Anthony Black, emeritus professor at the University of Cape Town’s School of Economics, says the industry’s complaints have some merit. “Some of their requests have some validity. The growth in imports is a problem,” he says. “The policy also needs to be adjusted to not make it worthwhile to set up SKD operations. I feel quite strongly about that.”
Union leaders want higher tariffs on automotive imports. That would be politically challengingSouth Africa is trying to grow trading ties with China and India in response to US hostility. Tariffs would also add to inflation.
Donald Mackay, founder of consultancy XA Global Trade Advisors, suggests a modest tariff increase of up to 30% might help. “Anything which goes beyond that has massive effects on the price of cars in South Africa. The whole industry would be worse off with that.”
But something must change. “There’s an enormous problem in the automotive industry,” Mackay says. “The government is saying you get all these benefits if you manufacture here. Your big challenge is that those benefits are not enough to offset the unpleasantness of making cars here.”
Frank Stevens, Director of Automotive at the Department of Trade, Industry and Competition, told Bloomberg the department is “reviewing the masterplan”the South African Automotive Masterplan that sets policy framework until 2035.
The Human Toll
The crisis in Nelson Mandela Bay isn’t just about numbers on a spreadsheet. It’s about people like Kolisi, who worked 12 years at Goodyear as a machine operator and now struggles to find anything stable. It’s about a city that accounts for 40% of the country’s automotive jobs but faces serious social challenges. Gang violence and drugs are rife. The municipality has the highest murder rate in South Africa.
Denise van Huyssteen, head of Nelson Mandela Bay’s local business lobby, has lived through this before. She was working for General Motors when it pulled out in 2017 after 90 years of operations, costing 600 jobs. “Many years ago, it was good for us to be compared to Detroit,” she says, referencing the American Motor City that became the largest municipal bankruptcy in US history after its auto industry collapsed.
“We’re at a tipping point now. If we don’t move with speed and action, we’ll go down the same road.”
A Glimmer of Hope
It’s not all doom, the CEOs insist. Progress is being madeslowlyon a pan-African free trade agreement that could open up enormous regional markets. That’s a long-term prospect, but it offers something to work toward.
In the meantime, industry leaders and unions express frustration that government doesn’t appear to be taking the brewing crisis seriously enough. More job losses and factory closures seem inevitable. The Detroit of South Africa is running out of time.
For Kolisi, the future is simple and terrifying. “I’m slowly beginning to lose that hope,” he says. In a city built on cars, hope is the one thing that’s hardest to manufacture.
