The scent of opportunity, mixed with a whiff of uncertainty, hung heavy at the Centurion Country Club on Thursday, May 8th. Leading figures in South Africa’s automotive industry gathered for the “African Connection” breakfast, a timely pow-wow hosted by Messe Frankfurt South Africa, where the talk wasn’t just about horsepower, but about economic power plays.
The gathering, a regular fixture on the industry calendar, arrived amidst a perfect storm of shifting trade agreements, vexing tariffs, and an increasingly complex global chessboard. As Michael Dehn, Managing Director at Messe Frankfurt, aptly put it, South African automotive businesses are in an active hunt for new partnerships and market opportunities. “The discussions taking place at these events reflect the current trends in the industry,” Dehn observed, “Companies are adapting to rapid change and repositioning themselves within evolving trade frameworks, such as the African Continental Free Trade Area (AfCFTA), African Growth and Opportunity Act (AGOA) and among Brazil, Russia, India, China and South Africa (BRICS) countries.”
The American Curveball
The elephant in the room, or perhaps more accurately, the imposing SUV, was the recent salvo of US tariffs. A hefty 25% levy now applies to vehicles (since March 2025) and their components (effective May 2025), piled on top of a 10% baseline tariff on all imports. This marks a significant detour from the pre-tariff landscape, where a comfortable 99% of South African vehicles and parts rolled into the US duty-free under the AGOA.
For an export economy where vehicles and parts account for a formidable 15% of total exports to the United States – South Africa’s second-largest export market – this isn’t just a speed bump; it’s a potential road closure.
The Shifting Sands of Export
Dr. Paulina Mamogobo, Chief Economist at NAAMSA (the Automotive Business Council), offered a sober assessment. While the European Union remains the dominant export destination, gobbling up over 76% of South African automotive exports, the looming US tariffs have already cast a long shadow. A “preemptive impact” was evident in Q1-2025 figures, with exports to the US plummeting from 6% in 2024 to a mere 2%. However, Mamogobo noted, this dip was cushioned by increased exports to other destinations. More detailed insights are expected when NAAMSA unveils its Automotive Trade Manual on May 15th.
Mamogobo presented the AfCFTA as a strategic countermove, a bold gambit to create a $3.4 trillion market across 44 African nations by dismantling tariffs and turbocharging intraregional trade. Yet, the elephant in the room, or perhaps the underdeveloped road network, remains the formidable challenge of infrastructure gaps.
Global Jousting and African Horizons
Ronel Oberholzer, Head of Sub-Saharan Africa Economics at S&P Global Market Intelligence, painted a picture of an even more intricate global landscape. China’s EV oversupply, a formidable tide, threatens to flood African markets, posing direct competition for South African manufacturers. Meanwhile, India’s low-cost prowess intensifies the competitive heat. For Oberholzer, the BRICS nations, while not necessarily new markets for finished South African goods, represent crucial sources of investment for the continent.
Jenny Tala, Director of Southern Africa for Germany Trade & Invest, minced no words: the US tariffs effectively “nullify the benefits of the AGOA,” a direct threat to South Africa’s automotive manufacturing competitiveness. Her advice? Diversify, diversify, diversify—by expanding both regional and international trade relations.
Duane Newman, Partner: EY South Africa, however, offered a glimmer of hope, suggesting South Africa could stand to benefit from global trade tensions, particularly in the wake of the Trump administration’s protectionist inclinations. The country, he argued, is strategically poised for heightened investment as multinational manufacturers look to de-risk their supply chains away from Mexico and China. Newman also highlighted a potential boon for South African manufacturers, still largely producing internal combustion engine (ICE) vehicles, as the US administration signals a reduced focus on New Energy Vehicles (NEVs).
But Donald MacKay, CEO: XA Global Trade Advisors, delivered a stark reminder of Africa’s inherent challenges. Underdeveloped road and rail networks translate into crippling transportation costs. While rail transport is five times pricier than water, it’s still half the cost of road freight, underscoring the urgent need for infrastructure investment to lubricate the wheels of automotive trade across the continent.
Navigating the Unpredictable
“While it is impossible to predict exactly what will happen next in this volatile landscape, I am confident that our exhibitions will continue to be the place where these critical business connections are made,” Dehn concluded.
In the current climate of global economic turbulence, gatherings like Automechanika Johannesburg are not just trade shows; they are critical crucibles, shaping the emerging global trade landscape, one connection and one discussion at a time.
