South African Auto Industry Seeks Trump’s Support for AGOA

The automotive industry in South Africa remains hopeful about the possible extension of the Africa Growth and Opportunity Act (Agoa), which provides duty-free access to the U.S. market.

Mikel Mabasa, CEO of the automotive business council Naamsa, remarked on Thursday that while many analysts argue that Agoa “is already a thing of the past,” the automotive sector firmly believes it can persuade the U.S. administration to extend the agreement beyond its expiry in September 2025, expressing “hope for a significantly different outcome.”

Read: Tariffs have essentially undermined Agoa – Tau

Mabasa acknowledged during a press briefing for the launch of the 2025 Automotive Trade Manual that U.S. trade relations “are undeniably a moving target.”

He noted that The Presidency announced President Cyril Ramaphosa will visit the U.S. early next week to engage with President Donald Trump’s administration.

Mabasa indicated that Naamsa has already met with Mcebisi Jonas, the president’s special envoy to the U.S., who has sought insights from the industry regarding the challenges posed by current trade and tariff issues.

He mentioned that Naamsa will provide information to Ramaphosa’s office to highlight the importance of the U.S. market for South Africa’s automotive sector.

“We definitely want to keep exporting our vehicles to the U.S.,” he stated.

“It’s an exceptionally attractive market, and we are committed to ensuring our efforts there continue.”

Mabasa also noted that Naamsa is cooperating closely with partners and government stakeholders to advocate for the prolongation of the Agoa agreement.

Export volumes and tariffs

Total automotive exports from South Africa to the U.S. amounted to R28.67 billion in 2024, according to the 2025 Automotive Trade Manual.

This positioned South Africa as the third-largest automotive export nation in 2024, behind Germany and Belgium.

In March 2025, Trump announced a 25% tariff on all vehicle imports and foreign automotive components to the U.S.

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These tariffs will undermine any duty-free access currently granted to South African automotive exports under Agoa.

The vehicle tariff took effect on 3 April 2025, while the effective date for the tariff on vehicle components and parts was expected to be announced at the beginning of this month.

Tariff issue ‘fluid and volatile’

Naamsa’s chief trade and research officer Norman Lamprecht expressed concerns regarding the U.S. tariff landscape, stressing its fluidity and volatility.

Lamprecht highlighted a recent agreement between the U.S. and China to reverse tariffs for 90 days to ease trade tensions.

Read:
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He believes that the South African automotive sector should still advocate for the continuation of Agoa, although domestic original equipment manufacturers (OEMs) have started to adapt to the situation and develop contingency plans.

Lamprecht remembered that the previous U.S. administration had aimed to extend Agoa for an additional 16 years until 2041.

The manual pointed out that as an export-driven sector, South Africa’s automotive industry has been facing a significant crisis since 2024, as the unpredictability of rising tariffs and a potential trade war has created a state of chronic uncertainty.

“Unlike past crises, the long-term implications of these tariffs remain unclear, complicating production planning and investment decisions that usually extend years into the future.

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“Trade agreements are crucial for South Africa as they create a framework that enables smoother, more cost-effective, and competitive trade among nations,” it emphasized.

The manual further notes that just-in-time supply chains are particularly vulnerable, and due to limited capacity to shift production or secure alternate suppliers, OEMs and their suppliers are preparing for cost increases, potential shutdowns, and rising vehicle prices.

It stressed that the automotive industry is a vital component of the economy, where exports are critical for achieving higher production volumes and benefiting from economies of scale.

Read: SA auto industry achieves R21bn positive trade balance

Naamsa’s chief economist Paulina Mamogobo indicated that the automotive sector contributed 5.2% to the country’s GDP in 2024, with automotive exports representing 14.6% of total South African exports.

Chinese vehicle influence

The increasing presence of Chinese vehicle brands in the South African market was also highlighted during Naamsa’s briefing.

Moneyweb previously reported that Chinese brands are disrupting South Africa’s vehicle retail sector, primarily with competitive pricing.

Mamogobo pointed out that India was the leading source country for passenger cars and light commercial vehicles (LCVs) imported into South Africa in 2024, with 173,742 vehicles accounting for 57.1% of total light vehicle imports. China held the second position, contributing 17.1% of car and LCV imports.

She mentioned that many global manufacturers have established India as a production hub for small car facilities, with most imported vehicles from India falling into the small car and entry-level segments.

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Mamogobo stated that the rising demand for affordable vehicles has created new opportunities for brands entering the local market, thus providing consumers with a broader range of options.

“In 2024, South Africa welcomed no fewer than six different Chinese brands, in addition to three brands that were launched in 2023.

“In total, there were 14 distinct brands from China operating in the local new vehicle market in 2024, with more expected to follow in 2025,” she noted.

Mabasa remarked that the influence of Chinese brands in South Africa is not an isolated phenomenon; these brands are making inroads into global markets.

Read: SA auto industry faces challenge from the shift toward imported vehicles

He added that Naamsa is actively collaborating with the Chinese brands present in the South African market, some of which have expressed interest in setting up completely knocked down (CKD) production facilities in the country.

“Three specific OEMs have shown interest in exploring this opportunity further, and we are assisting them in developing their business cases,” he stated.

Mabasa concluded by expressing Naamsa’s ambition to achieve an annual vehicle production target of 1.4 million units by 2035. This goal aims not only to enhance the production capabilities of existing OEMs but also to attract new investments into South Africa.

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