Stellantis NV will decide the fate of its planned 3 billion rand ($183 million) car plant in South Africa within the next few months, following a decision to pause the project so engineers can adapt the facility for cheaper models.

The Amsterdam-based automaker, created through the merger of PSA Group and Fiat Chrysler Automobiles, had planned to open a pickup-only assembly plant in Coega, Eastern Cape, by 2025. Under the revised timeline, production will begin by mid-2028 if the project wins final approval later this year, Mike Whitfield, managing director of Stellantis South Africa, said.

The delay comes as global automakers face intense competition from Asian rivals. That pressure has shifted consumer demand toward vehicles priced below R400,000 ($24,400), forcing Stellantis to redesign the factory to handle multiple vehicle types rather than a single line.

“Originally, our plant was going to be a pickup-only plant,” Whitfield said at a media briefing on Tuesday. “Right now, we are reframing the plant to be able to support more than one model. That is a process that is underway to see how we can ensure that it has a very viable and sustainable business case.”

Driving local production to protect African jobs

Company officials said workers have already cleared 34 hectares of land for the site. Despite the setback, Stellantis still intends to build 50,000 vehicles a year. Producing extra models will require more capital, though Whitfield declined to give a specific dollar figure or estimate job numbers.

To make the factory viable, Stellantis is lobbying the South African government to adjust its Automotive Production and Development Programme. The subsidy system currently rewards large-scale production, but industry executives say it needs changes to protect local factories against cheap imports.

“There are ongoing discussions with government, looking at how they can fine-tune and support the existing motor industry,” Whitfield said. “The discussions with government include how we ensure that what we have got, we do not lose.”

Whitfield said higher import tariffs are not the solution. Instead, South African supply chains must become efficient enough to tap into the African Continental Free Trade Area. The long-term goal for the sector is to ensure that 60 percent of all vehicles sold in sub-Saharan Africa are built within the region.

Stellantis targets MEA market-share growth

Stellantis holds just a 1.6 percent share of South Africa’s vehicle market but aims to raise that to 5 percent by 2030. To achieve that, the automaker is narrowing its local portfolio to five core brands: Peugeot, Fiat, Jeep, Citroën and Leapmotor. The strategy centers on affordable vehicles, targeting the 65 percent of South African buyers who spend less than R425,000 ($25,900) on a car, with Citroën models and entry-level Jeep vehicles imported from India and China.

Electric vehicles will also play a role in the low-cost expansion. The carmaker plans to bring the Fiat Tris, a small electric vehicle, to South Africa by late 2026 to target urban delivery drivers and commuters. Kabelo Rabotho, director of micromobility for Stellantis South Africa, said the company wants to eventually assemble the electric micro-car locally to serve sub-Saharan Africa.

The African expansion is part of a broader push across the Middle East and Africa. Samir Cherfan, the chief operating officer for the region, said Stellantis wants to increase regional revenue by 40 percent while maintaining double-digit operating profit margins. The group intends to source 90 percent of its regional sales from 22 product lines built either in regional factories or imported from low-cost hubs in Asia.