South Africa is considering imposing anti-dumping tariffs of up to 50% on vehicles from China and India as surging imports exert pressure on the local automotive manufacturing sector.
International Trade Administration Commission of South Africa (Itac) chief commissioner, Ayabonga Cawe, highlighted the option during Parliament’s portfolio committee meeting on trade, industry and competition on Tuesday. He said current duties on completely built-up passenger vehicles were around 25%, but the country's World Trade Organization-bound rates allowed for tariff increases of up to 50%.
The proposal comes as India and China have become dominant vehicle suppliers in the local market, the committee heard, with reports indicating that India and China supply 53% and 22% respectively of total vehicle imports.
Local producers highlighted the decline in domestic production and localisation, noting that imports now accounted for 55% of national sales. Sales volumes of Chinese and Indian vehicles rose 368% and 135% respectively since 2020.
National Association of Automotive Component and Allied Manufacturers (Naacam) representative, Shivani Moothilal, said local production had stagnated below pre-Covid-19 levels at about 600 000 units a year, with forecasts of 560 000 units in 2026 and 2027.
He said local content had declined by an average of 1.1% per year over the past 25 years, contributing to retrenchments and plant closures. Over the past three years, Naacam recorded 13 component company closures, with more expected this year.
Toyota South Africa president Andrew Kirby said the domestic market continued to lack scale, while BMW South Africa CEO, Peter van Binsbergen, warned that only one in three new vehicles sold were now locally produced, compared with two in three previously.
Van Binsbergen warned that the industry was vulnerable due to its reliance on the UK-EU market, which absorbed 80% of South Africa’s new-vehicle exports but was rapidly transitioning to new-energy vehicles.
Proposals on tariffs, ad valorem tax adjustments, and structural reforms to encourage localisation are expected to be finalised for ministerial consideration by the end of February.
