South Africa’s automotive industry faces further pressure from the planned withdrawal of preferential access to the US market. Existing US tariffs have already cut vehicle exports by 83.2%.
The US has given South Africa 60 days’ notice of its intention to end the country’s eligibility for benefits under the African Growth and Opportunity Act (AGOA) from 1 January 2027.
The withdrawal would remove preferential tariff access but would not prevent South African vehicles and automotive components from entering the US market.
In a statement issued last week, naamsa ,The Automotive Business Council said the additional impact of losing AGOA benefits was expected to be limited. Vehicle exports had already fallen sharply following the introduction of US Section 232 tariffs.
“The proposed termination does not close the US market to South African automotive products. Exports will remain possible, although subject to the applicable US tariff regime,” naamsa said.
The US introduced 25% tariffs on imported vehicles in April 2025 and automotive parts in May 2025.
Naamsa reported that South African vehicle exports to the US fell from 24,682 units in 2024 to 4,136 in 2025. This represents an 83.2% decline.
The National Association of Automotive Component and Allied Manufacturers (NAACAM) said the 25% tariffs had already largely eroded the industry’s preferential access under AGOA.
Its chief executive, Renai Moothilal, said losing the benefits would increase pressure on manufacturers.
“Losing AGOA adds a further cost to an industry that has already absorbed a significant shock,” he said.
NAACAM reported that automotive exports to the US declined by 29%, from R28.67-billion in 2024 to R20.43-billion in 2025.
Direct component exports fell by 12.8% to R3.86-billion. Light-vehicle exports also declined by 31.7% to R16.57-billion.
From January 2027, South African automotive products will also lose their preferential tariff treatment. NAACAM said ordinary US import duties on automotive products were typically about 2.5%.
Moothilal said even a relatively small increase in costs could affect the industry’s competitiveness.
“The direct cost of losing AGOA is modest next to existing tariff measures, but in a globally competitive industry every percentage point counts,” he said.
The pressure on the automotive industry extends beyond export earnings. NAACAM reported 15 company closures and more than 7,500 gross job losses among component manufacturers over the past three years.
The association linked these pressures to declining local content, production cuts at some vehicle manufacturers, falling exports and rising operating costs.
The reported closures and job losses were not attributed solely to the proposed AGOA withdrawal.
Naamsa and NAACAM called for continued engagement with the US to address the trade barriers.
Naamsa said it would provide industry evidence and economic analysis to support trade discussions. The council said these efforts would focus on protecting manufacturing competitiveness, investment and jobs.
NAACAM called for a mutually beneficial trade agreement covering trade, investment, skills development and technology transfer. It also called for discussions on the existing Section 232 tariffs.
The Department of Trade, Industry and Competition said on 2 November that it was engaging affected industries. It would provide support on a company-by-company basis.
The department said about 10% of South African exports to the US…
