Vehicle exports from South Africa to the US dropped by 73% in the first quarter of the year, declining by a further 80% and 85% in April and May, respectively, says naamsa | the Automotive Business Council.

“This represents a direct loss of vehicle and component export volumes, and annual export earnings, which would be difficult to recover in the short term,” states the auto industry association.

This dramatic decline came as US President Donald Trump threatened to increase tariffs on South African-made cars and parts, with this threat now a reality as the tariff order is set to come into effect on August 1.

naamsa says South Africa’s automotive sector is particularly vulnerable to the 25% sectoral tariff imposed under Section 232 of the US Trade Expansion Act of 1962, which specifically targets automotive exports.

“This escalation in trade tensions poses a serious threat to one of South Africa’s most globally integrated and export-oriented industries.”

naamsa notes that the US has consistently been South Africa’s second-largest trading partner and key export destination for locally manufactured vehicles.

In 2024, the domestic auto sector accounted for 64% of all of South Africa’s trade under the African Growth and Opportunity Act, generating R28.6-billion in export revenue, with 24 681 vehicles exported to the US under the preferential trade agreement.

naamsa warns that the South African operations of original equipment manufacturers (OEMs, or vehicle manufacturers), which have invested significantly in local manufacturing plants, skills development and export infrastructure, now face major pressure.

“This is not just a trade issue – it’s a socio-economic crisis in the making,” warns naamsa CEO Mikel Mabasa.

“The US tariffs directly threaten thousands of jobs in our sector, disrupt hard-won industrial capabilities, and risk devastating communities such as East London, where the auto sector forms the economic heartbeat of the town.

“If we cannot retain export markets like the US, we risk turning vibrant industrial hubs into ghost towns.”

Mercedes-Benz South Africa manufactures the C-Class sedan for the local and export markets. The company’s East London operation has been shuttered until August 1 owing to low demand.

naamsa believes the ripple effects of lost production owing to disappearing export markets will be felt throughout the automotive value chain, from component manufacturers to logistics providers and all of the staff at these companies.

“Export diversification and finding new markets is not something that can be achieved overnight,” says Mabasa.

“Our global competitors are already redirecting their exports into markets we traditionally serve.

“This intensifies the pressure on our OEMs, which must now absorb rising costs, reduce production and reconsider their future investments.

“We urge both governments to accelerate negotiations toward a balanced, rules-based trade agreement,” says Mabasa.

“We are encouraged by early proposals for a quota of 40 000 duty-free

vehicle units per annum, which would allow us to retain our footprint in this key market.

“It’s vital that we use this opportunity to preserve the business case for continued investment.”