South Africa’s automotive industry is showing resilience in the face of escalating trade tensions with the United States, but new and steeper tariffs are casting a shadow over the sector’s future.
Despite a 25% US tariff on South African goods taking effect in April, year-to-date vehicle exports are up 2.5% compared to the same period last year, according to Naamsa, the Automotive Business Council. The industry’s ability to pivot and diversify its export markets has helped to cushion the blow.
“South Africa’s automotive industry has long relied on the strength of its export engine to drive production, attract investment, and create high-value employment,” Naamsa CEO Mikel Mabasa said in a statement. “The current environment has tested that model, but our ability to maintain solid export volumes amid escalating trade uncertainty demonstrates the commitment of our OEMs to South Africa’s industrial base.”
The sector’s export destinations have expanded to 109 international markets in 2024, a key factor in mitigating the impact of the US tariffs, which replaced the country’s previous duty-free access under the African Growth and Opportunity Act (Agoa).
However, the pressure is mounting. Exports in July saw a slight 1.9% drop compared to the previous year, and a new, more punitive 30% US tariff is set to take effect this week. This follows unsuccessful negotiations between South African trade officials and their US counterparts.
The Department of Trade, Industry & Competition has announced emergency measures to help affected businesses, including the creation of an export service desk to assist companies in finding alternative markets.
While these efforts are a step in the right direction, the impact of the tariffs is already significant. Naamsa reports an 82% plunge in exports to the US in the first half of 2025. The US is South Africa’s second-largest trading partner and a crucial market for domestically manufactured premium vehicles.
The failure to secure preferential trade treatment from the US puts South African exports at a disadvantage against competitors who have successfully negotiated such deals. This could lead to job losses in the local automotive sector, particularly in the Eastern Cape, a key manufacturing hub.
Business leaders are calling for a coordinated response. Busi Mavuso, CEO of Business Leadership South Africa, has urged the president to establish a “trade crisis committee” with business leaders and key government officials to ensure a rapid and coordinated response.
Mabasa echoed this sentiment, emphasizing the need to deepen regional trade relations, expand market access in Africa and Asia, and accelerate the rollout of the country’s new energy vehicle transition strategy to ensure the sector’s future stability.
