South Africa considering auto industry incentives as tariff buffer

Nqobile Dludla

Thu, Apr 10, 2025, 7:02 AM 1 min read

By Nqobile Dludla

JOHANNESBURG (Reuters) - South Africa is considering offering further incentives to automakers to assistance cushion the interaction of U.S. President Donald Trump's tariffs connected cars, Trade, Industry and Competition Minister Parks Tau said connected Thursday.

"What we're presently considering is the anticipation of expanding the automotive manufacture accumulation program truthful that we're capable to mitigate the interaction successful our industry," Tau said successful an interrogation with vigor broadcaster Power FM.

"We're presently modelling what the imaginable bundle could beryllium for the car sector, but besides for different sectors truthful that we tin bash it wrong the means of the state to buffer the impact."

The Automotive Production and Development Programme is an inducement programme that helps thrust investment, innovation and occupation instauration successful the automotive industry. It offers assorted rebates and refunds connected customs duties and manufacturers besides person incentives based connected their accumulation volumes.

The National Association of Automobile Manufacturers of South Africa has expressed interest implicit the 25% U.S. import tariff connected cars, saying that it cannot beryllium absorbed by manufacturers, which volition effect successful further costs for U.S. consumers and a reduced prime of South African-produced brands.

The U.S. is the third-largest destination for South African automotive exports, with astir 35 cardinal rand ($1.8 billion) worthy of vehicles shipped successful 2024, accounting for 6.5% of full conveyance exports successful 2024.

South African-based manufacturing plants operated by BMW, Ford, Isuzu, Mercedes-Benz, Nissan and Toyota - which nutrient vehicles for planetary markets, including the U.S. - volition beryllium severely impacted NAAMSA added.

($1 = 19.3878 rand)

(Reporting by Nqobile Dludla; Editing by Mark Potter)