South Africa's auto industry faces uncertainty as US tariffs loom

SOUTH Africa's automotive industry faces an uncertain future as U.S. export tariffs loom, compounding struggles in a sector already hit by job losses and company closures over the past two years.

AI Brief

Since 2017, 12 car companies have closed in South Africa, with over 4,000 jobs lost due to low sales and rising imports.
US tariffs on cars and parts threaten more job losses as South African firms risk losing American contracts.
South Africa submitted a revised trade offer to the US to reduce the 30% tariff imposed by President Trump.

Trade Minister Parks Tau said on Wednesday (August 13) that low domestic sales of locally made cars, an influx of imports and low levels of local content have led to 12 company closures and over 4,000 job losses in the South African motor industry since 2017.

The industry employs 115,000 people directly, with over 80,000 in component manufacturing alone. Experts warn that U.S. tariffs on cars and parts imposed in April threaten more jobs as some companies lose American contracts.

"In the short term, some U.S. contracts will continue. In the medium term, we'll start seeing losses," Renai Moothilal, CEO of the National Association of Automotive Components and Allied Manufacturing (NAACAM), told Reuters on Tuesday.

"In terms of shifting to new markets immediately, there's a lot of work to be done... And other countries facing U.S. tariffs will also be seeking new markets," he added.

South Africa submitted a revised offer for a trade deal with Washington on Tuesday, aiming to reduce the 30% tariff U.S. President Donald Trump imposed last week.