While some automotive original-equipment manufacturers have called for higher import tariffs on Chinese and Indian vehicles, along with other measures to ensure local manufacturers are able to compete on an even footing, trade union Motor Industry Staff Association (MISA) says such tariffs damage the motor retail market and worker livelihoods.

Trade, Industry and Competition Deputy Minister Zuko Godlimpi in January told the Parliamentary Portfolio Committee of Trade, Industry and Competition that the government would have no choice but to impose antidumping duties on imported vehicles to protect the domestic manufacturing sector, given the surge in imports of completely built-up vehicles from India and China.

Representatives from BMW South Africa, meanwhile, said the industry was seeking fine-tuning of all the levers within the Automotive Production and Development Programme, rather than steep increases in import duties that would likely have unintended consequences.

MISA plans to submit a plan to the Department of Trade, Industry and Competition outlining alternative measures to a 50% import tariffs to mitigate impacts on the retail motor industry.

The association emphasises the need for government measures that support local investment without harming the retail motor industry.

Automotive retail makes up a substantial part of the automotive sector, MISA media and communications manager Sonja Carstens explains, saying automotive manufacturing currently accounts for 2.4% of GDP and retail 1.9%.

MISA represents 75 000 members in the retail motor industry, which Carstens says have benefited from the influx of Chinese and Indian brands in the South African market – in fact, some dealerships and retail establishments have reported record vehicle sales in recent months.

“The retail motor industry has been through a difficult period, with dealerships and component manufacturers having closed down or effected retrenchments. There was no growth until more Chinese and Indian vehicles started being imported in the market.

“Where we used to see one in every six vehicles sold being Chinese or Indian, it is now down to one in every four,” Carstens states.

In turn, employment in the motor retail industry has managed to recover from 309 000 in July last year to 311 000 currently.

As another significant part of the automotive industry in South Africa, MISA says automotive retail stakeholders also need protection, especially since the Automotive Masterplan does not consider the impact of some of its imperatives on dealerships.

Carstens points out that MISA advocates for local investment and local manufacturing, but believes government can enforce that by, for example, putting a timeframe in place whereby Chinese and Indian vehicle importers need to start assembling vehicles or manufacturing parts locally.

She cites the example of Chery South Africa's proposed acquisition of Nissan South Africa’s manufacturing operations in Rosslyn, which is an example of how jobs can be preserved while continuing local investment.

Another suggestion MISA has is to review the current manufacturing subsidiary pass-through to assess why South African subsidies are not translating to lower consumer prices, which would make local vehicles more competitive with that of the heavily subsidised Chinese brands.

Carstens highlights that consumers are benefitting from lower prices and improved market conditions, which benefits the motor retail industry and its employees. “The positive impact of young people being able to buy cars for the first time is a sign of economic growth,” she adds.