South Africa is located at the southernmost tip of the African continent, bordering the Indian Ocean to the east and the Atlantic Ocean to the west. It is a transportation hub between the two oceans and has a coastline of more than 3000 kilometers. The total land area is 1.219 million square kilometers and there are 6 land neighboring countries.

South Africa has a population of approximately 63 million (2024 data). It has four major ethnic groups: black, colored, white and Asian. There are 11 official languages.

South Africa's mineral resources are one of the five largest mineral resource countries in the world. At present, there are more than 70 minerals with proven reserves and extracted, with a total value of approximately US$2.5 trillion. Its reserves, output and export volume of platinum group metals, manganese ore, gold, diamonds, fluorite, vanadium, vermiculite, zirconium group ores, titanium group ores and other minerals rank among the top in the world.

Overview of South Africa's economy

According to World Bank data, in 2023, South Africa's GDP will be US$377.78 billion, and per capita GDP will be US$6,253.3.

In 2023, South Africa's primary, secondary and tertiary industries will account for 7.9%, 17.4%, and 74.7% of GDP respectively. Manufacturing and mining are South Africa's characteristic industries. South Africa's mining machinery, mineral processing technology and equipment, mine communication and safety technology, and mineral product smelting and processing technology all rank among the top in the world.

In 2023, South Africa's total trade in goods will be US$218.6 billion, of which imports will be US$107.6 billion and exports will be US$111 billion. South Africa is China's largest trading partner in Africa, and bilateral trade with China has maintained a stable development trend.

South African Automobile Market

As Africa's largest automobile market and manufacturing center, total automobile production accounts for 54.1% of Africa's total.

The automobile industry has always been an important part of South Africa's manufacturing industry and an important pillar of the economy. It is also one of the major countries in the world's manufacturing, import and export of automobiles and parts.

In 2023, South Africa's automobile sales will be 485,175 units and 399,594 vehicles will be exported, an increase of 13.6% over the previous year and accounting for 63.1% of South Africa's annual automobile production.

South Africa's used car market is very large. It is expected that by 2030, its market size will increase from US$19.75 billion in 2025 to US$32.53 billion, with a compound annual growth rate of over 10%.

South Africa's new energy vehicle industry policy

·Provide tax rebates or subsidies for consumers to encourage the purchase of electric vehicles. The proposed subsidy amount is between 30,000-50,000 rand, which is approximately RMB 10,000 - 20,000.

·In February 2023, the South African government announced a temporary expansion of the renewable energy tax incentive program. The expansion is 5 billion South African rand to provide tax support for wind, solar and hydropower.

·Starting March 1, 2026, electric and hydrogen-powered vehicle manufacturers will enjoy a 150% tax exemption on eligible investments.

Risk warning for South African cars going overseas market

1. Economic stagnation Real GDP growth will slow down in 2023, lower than the average level in sub-Saharan Africa, and real per capita disposable income will decline.

2. Power shortage As of early 2025, due to insufficient power generation capacity, power outages in various regions of South Africa are measured in hours every day. The country's total domestic power generation capacity is approximately 58,095 megawatts (MW), and actual power generation is low due to the aging of coal-fired power plants, which account for approximately 80% of the energy mix. Electricity shortages will have a significant impact on productivity, employment, working hours, etc.

3. Social unrest After the 2024 general election, South Africa's ruling party lost its majority of seats for the first time and formed a coalition government with the Democratic Alliance (DA). It is difficult to advance reforms and the political landscape is unstable.

The unemployment rate will reach 32.4% in 2023, the fourth highest in the world, and it is expected that the unemployment rate will remain high from 2024 to 2028.

Source: Yangtze River Delta new energy vehicle industry offshore base

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