South Africa considers 50% tariffs to protect local car industry

Key topics:SA weighs tariffs up to 50% on Chinese and Indian vehicle importsImport surge from China, India pressures local auto manufacturingUS tariffs and AGOA uncertainty threaten SA auto exports.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up for the BizNews channel here..By S'thembile Cele and Ntando Thukwana.South Africa is considering imposing tariffs of as much as 50% on vehicles from China and India as it moves to protect its automotive industry from a flood of imports.An internal review is being conducted by the Department of Trade, Industry and Competition to assess potential measures to stem inbound shipments, which policymakers say are undermining domestic manufacturing. .Among the options under consideration is an amendment to South Africa’s tariff schedule to bring import levies in line with World Trade Organization concessions for most-favored nations, Ayabonga Cawe, the commissioner of the country’s International Trade Administration Commission, told lawmakers in Cape Town on Tuesday. “For completely built-up passenger vehicles, the bound rates there are at 50%, our duties at the moment are at around 25%,” Cawe said. “On components, there is some room to maneuver — depending on what the origin market is — of between 10% and 12%.”.Read more:.The Economist: Tariff turmoil threatens US economy .Shares of some Indian automakers declined on Wednesday, with Maruti Suzuki India Ltd. and Hyundai Motor India Ltd. dropping as much as 2.9% and 2.1% respectively. .“Africa is the biggest export destination at Maruti Suzuki,” said Tatsuo Yoshida, a Bloomberg Intelligence analyst. “Given that South Africa is the largest automobile market in Africa, a significant portion of these exports is likely destined for South Africa. Higher tariffs will be negative for Maruti’s exports business.”China, India and South Africa are part of the BRICS group of developing nations, which has been working toward deepening trade ties between its members.Vehicles sourced from China and India — now the world’s two largest manufacturing hubs — accounted for 53% and 22% of South Africa’s total vehicle imports respectively in 2024. Vehicle shipments from China have surged 368% over the past four years, while those from India are up 135%. Competition has been fiercest in the entry-level segment of the market, with lower-priced imports compressing margins for domestic producers. Read More: Chery Overtakes Suzuki to Rank Second in South African Car Sales The trade department is likely to consult the National Treasury on potential tax measures, including the introduction of excise duty on new luxury cars and a review of how rebate credit certificates function. The import levies may offer some relief to an industry that is also under pressure on the export front, after the US imposed a 30% tariff on some goods from South Africa last year — the highest in sub-Saharan Africa.“The US is South Africa’s third-largest automotive export destination, with 28.7 billion rand ($1.8 billion) in exports recorded in 2024,” said Mkhululi Mlota, chief director of automotives at the DTIC. The new US tariff measures and uncertainty over eligibility for a possible 2028 extension of the African Growth and Opportunity Act — a preferential trade deal with the world’s largest economy — pose serious risks, he said. “These risks extend across the value chain, from component manufacturers to original equipment manufacturers’ export programs,” Mlota added. “The rise of China as a competitive producer of high-tech but more affordable vehicles is also intensifying competition for South African-produced vehicles in export markets.”.© 2026 Bloomberg L.P.

South Africa considers 50% tariffs to protect local car industry

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