South Africa is considering offering extra incentives to automotive manufacturers to help mitigate the effects of tariffs.
Trade, Industry, and Competition Minister Parks Tau stated that South Africa is exploring fresh incentive strategies for its automotive sector to counter the effects of U.S. President Donald Trump’s newly imposed tariffs on imported cars.
During an interview with Power FM, Tau mentioned that the government aims to expand the Automotive Industry Production Plan to lessen the economic impact of the U.S. 25% import tariff.
Tau noted that the officials are exploring ways to assist additional sectors and are currently assessing a potential package for the automotive industry, ensuring it aligns with the country’s available resources to minimize the impact.
South Africa’s Automotive Production and Development Programme (APDP) bolsters the automotive sector through rebates, duty refunds, and production-based incentives. Its primary goal is to promote investment, foster innovation, and create employment opportunities within the industry.
Industry representatives have raised alarms regarding the U.S. tariff. The National Association of Automobile Manufacturers of South Africa (NAAMSA) cautioned that local producers cannot bear the cost of the levy, which may result in increased prices for American consumers and a reduced supply of South African-made vehicles.
The Automotive Production and Development Programme may be extended to offer additional support to manufacturers, including BMW, Ford, Isuzu, Mercedes-Benz, Nissan, and Toyota.
The United States ranks as South Africa’s third-largest market for automotive exports. In 2024, South Africa shipped vehicles worth around R35 billion ($1.8 billion) to the U.S., accounting for 6.5% of the nation’s total vehicle exports.
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