<\/p>\n
Losing preferential access to the US market under the African Growth and Opportunity Act (Agoa) from 2027 adds further pressure\u00a0 to the local SA motor manufacturing industry, which was the biggest beneficiary of the scheme, says the National Association of Automotive Component and Allied Manufacturers (Naacam).<\/p>\n
Its comments on Tuesday came after the US confirmed on Monday evening that it plans to remove SA from Agoa, claiming that SA is undermining US national security and creating barriers to US investment into the country.<\/p>\n
Read:
South Africa, Rwanda lose access to Agoa
SA\u2019s Agoa exit is not the end of US market access<\/p>\n
\u201cSouth Africa\u2019s automotive industry has been Agoa\u2019s largest user, but for the sector the preference has already been largely overridden by the 25% Section 232 tariffs applied to vehicles and components,\u201d says Renai Moothilal, CEO of the Naacam.<\/p>\n
The US applied these tariffs in the second quarter of 2025 to vehicles, select components, and aluminium and steel products.<\/p>\n
\u201cLosing Agoa adds further cost to an industry that has already absorbed a significant shock,\u201d says Moothilal.<\/p>\n
Following the introduction of Section 232 tariffs:<\/p>\n
ADVERTISEMENT<\/p>\n
CONTINUE READING BELOW<\/p>\n
SA\u2019s automotive exports to the US fell from R28.67 billion in 2024 to R20.43 billion in 2025.
\nDirect component exports fell 12.8%, to R3.86 billion.
\nLight vehicle exports plunged by 31.7% to R16.57 billion, affecting not only domestic original equipment manufacturers (OEMs) but also their entire domestic supply chain.<\/p>\n
From January 2027, when Agoa is expected to lapse for SA, cars and components exported to the US will also pay the standard US import duty, typically around 2.5% for automotive products.<\/p>\n
Naacam CEO Renai Moothilal. Image: Supplied<\/p>\n
This widens the gap with competing producers in the UK, the EU, Japan and South Korea, which have negotiated lower automotive tariffs, according to Naacam.<\/p>\n
\u201cThe direct cost of losing Agoa is modest next to existing tariff measures, but in a globally competitive industry every percentage point counts,\u201d says Moothilal.<\/p>\n
SA\u2019s loss of Agoa benefits comes on top of existing pressures on the component manufacturing sector.<\/p>\n
Naacam has recorded 15 company closures and more than 7 500 gross job losses among component manufacturers over the past three years. These were driven in part by declining local content, production cuts at some vehicle manufacturers, falling exports, including to the US, and rising operational costs.<\/p>\n
Read:
South African businesses see \u2018minimal\u2019 impact of Agoa exclusion
Agoa exit puts SA citrus and US supply-chain jobs at risk<\/p>\n
Naacam says that the strongest buffer against external trade shocks lies in increasing the sales of locally produced vehicles to South Africa consumers and increasing production of local components.<\/p>\n
ADVERTISEMENT:<\/p>\n
CONTINUE READING BELOW<\/p>\n
However, results from listed car dealer groups such as CMH and Motus, show Chinese cars are surging in popularity.<\/p>\n
The South African Automotive Masterplan, an industry compact between the government and industry, set a goal of 48.2% local content by 2025, worth around R101 billion. Instead, local content stood at 39% in 2025, about the same as the 38.7% recorded in 2015, when local content was worth R53 billion.<\/p>\n
Read:
Jebb McIntosh \u2013 CEO of Combined Motor Holdings \u2013 passes away
Motorists mobilise to challenge Sars over foreign-registered vehicles
Affordability drives structural shift towards SUVs<\/p>\n
Moothilal argues that SA should grow domestic vehicle sales and increase the manufacture of local components to support component makers, protect jobs and reduce exposure to trade shocks.<\/p>\n
Naacam wants the US and SA to pursue a mutually beneficial trade agreement covering trade, investment, skills and technology transfer, which should address the Section 232 tariffs.<\/p>\n
Moothilal says that the two industries\u2019 ties run both ways: SA imported R20.6 billion of US-made components in 2025, more than five times its component exports to the US, and the relationship is worth protecting.<\/p>\n
#Section #tariffs #Agoa #exit #squeeze #South #Africas #car #industry<\/p>\n","protected":false},"excerpt":{"rendered":"
Losing preferential access to the US market under the African Growth and Opportunity Act (Agoa)…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[4],"tags":[3046,19705,2184,234,600,3452,322,2550,551],"_links":{"self":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts\/19681"}],"collection":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=19681"}],"version-history":[{"count":0,"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts\/19681\/revisions"}],"wp:attachment":[{"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=19681"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=19681"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=19681"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}