After a decade of auto trade surpluses, the battle is beginning for SA

US President Donald Trump may not like it but SA has been pretty successful at trading in motor vehicles and assembly-line components.

Admittedly, the country represents a tiny fraction of the global motor industry — 0.65% of total production, to be precise — but a R42.8bn trade surplus is not to be sneezed at. In 2024, the local industry exported R268.8bn of goods and imported R226bn.

It was the 10th surplus in a row; between 2015 and 2024, the aggregate surplus was R253.5bn. It’s the sort of performance of which Trump can only dream. Last year, the US had a reported $205bn automotive trade deficit having exported $104bn and imported $309bn. 

SA was responsible for some of that deficit: it sent R28.7bn of goods to the US, of which R24.2bn was cars — primarily BMW X3s and Mercedes-Benz C-Classes. In return, SA imported R22.1bn, mostly assembly-line components. That represented a R6.6bn SA surplus. Add to that the R3.1bn of goods sold to Mexico and R241m to Canada — many of which are likely to have been built into US-bound vehicles through the regional US-Mexico-Canada Agreement — and SA is, in theory, sitting pretty. SA’s overall surplus more than doubled last year, from R21.1bn in 2023, despite a drop in exports.

The number of SA-made vehicles shipped to other markets fell to 390,844 from 2023’s record 399,809. But because of a greater percentage of high-value vehicles their value grew from R203.9bn to R205.4bn. Compared to R74.8bn of imports, that created a R130.6bn surplus. There was no such luck for components exports, whose value fell from R66.9bn to R63.4bn. This is due primarily to shrinking global demand for platinum-based catalytic converters, which clean harmful exhaust emissions from petrol and diesel engines.

Between 2021 and 2024, the annual value of catalytic exports fell from R34.9bn to R19.3bn. As the international shift to electric vehicles (EVs) gathers steam, the trend will only get worse. SA imported R151.2bn of assembly-line components last year. Set against the declining exports, that was an R87.8bn trade deficit. This, and other issues, underlines the fact that, despite SA’s decade-long record of motor industry trade surpluses, there is no room for complacency — either in dealings with the US or with the rest of the world.

The US is SA’s second-biggest automotive trade partner, representing more than 10% of total exports, so Trump’s 25% tariff on global automotive imports into the US — on vehicles since last month and through a proposed two-years phase-in for components — holds serious consequences for SA. It remains to be seen whether President Cyril Ramaphosa can overturn Trump’s evident hostility towards SA when the two leaders meet in Washington this week.

The potential loss of US sales is not the only threat to SA exports. As the 2025 edition of the Automotive Trade Manual, published on Thursday by local industry association Naamsa, explains, SA’s slowness in embracing the transition to electric vehicles (EVs) could stall ambitious plans to expand the scale of the local motor industry. A goal of the government’s 2021-2035 Automotive Production and Development Programme is for SA to account for at least 1% of global motor industry production by the end of the programme.

But last year’s 0.65% share was actually smaller than the 0.67% of a year earlier. In 2024, says the manual, global vehicle production fell 1% from 93.5-million to 92.5-million but SA’s slipped 5.2%, from 632,362 to 599,755. Of the last number, 350,384 were cars and 217,562 light commercial vehicles (LCVs), mainly bakkies. That left just over 31,000 trucks and buses.

Remarkably, 68.7% of SA-made cars and LCVs were exported. Of these, 75.7% went to Europe and the UK. From 2035, however, they are among markets planning to outlaw the sale of new vehicles powered by petrol and diesel internal combustion engines (ICE). The overwhelming majority of vehicles made in SA are ICE.

The government has belatedly offered incentives to encourage vehicle manufacturers to switch to EV technology and some companies — notably BMW SA, Mercedes-Benz SA, Toyota Motors SA and Ford Southern Africa — have begun to transition. Whether it will happen fast enough to avoid the full or partial loss of export deals is not yet clear. Companies can’t abandon ICE altogether because many smaller markets have neither the will nor the technology to go electric for many years. So, for the foreseeable future, the SA motor industry will have to follow parallel ICE and EV manufacturing routes.

It has been suggested SA vehicle and components companies should switch some export focus to the rest of Africa where there is huge scope for growth. Continent-wide, the new-vehicle market is just over 1-million. Strategists believe this could grow to 3-million, or even 5-million, over the next decade.

Much will depend on the success of Africa’s nascent free-trade agreement and the willingness of governments to ban the wholesale dumping of used vehicles from other parts of the world. If forecast African growth happens, SA will be an early beneficiary. Last year, it was responsible for just over 50% of all vehicles built in Africa — 599,755 out of 1.18-million.

Morocco followed with 559,645 but almost all of that went to Europe. The Mediterranean country has shown little interest in servicing African markets. SA, on the other hand, wants to grow African exports as fast as possible and is also at the heart of plans to develop a pan-African motor industry in which multiple countries will participate. As the trade manual shows, Africa is an important part of SA export efforts — albeit one made up of more than 50 disparate countries. In 2024, the value of vehicles and components sold across the continent was R48.1bn.

Of that, R27.3bn went to SA’s immediate neighbours, Botswana, Eswatini, Lesotho and Namibia. The R48.1bn was the second year in a row that African exports grew — from R34.9bn in 2022 and R42.8bn in 2023. The biggest African export market last year was Namibia, which took R9.8bn of SA automotive goods.

That ranked it sixth among SA’s global automotive customers. Ahead were Germany (R79.1bn), Belgium (R29.8bn), US (28.7bn), UK (R24.5bn) and Spain (R14.1bn). The top 10 was rounded out, in order, by Australia, Botswana, Zambia and Zimbabwe.

If SA does find it necessary to compensate for EV-related export losses, it can expect little short-term support from its “allies” in the Brics consortium of emerging economies. India and China are flooding the SA market with their automotive goods but very little is moving in the opposite direction.

Last year, China exported R49bn to SA but took only R574m in return. India exported R30.1bn and imported R29.9m. SA imported 304,355 cars and bakkies last year, representing 78% of cars sold here last year and 22.8% of bakkies. India accounted for 173,742 (57.1%) of the imports and China for 52,057 (17.1%). India is a major manufacturing hub for entry-level cars and many of the vehicles it sent were European and Japanese brands.

China’s growth comes from its own brands. So far, a handful of Indian and Chinese brands have set up vehicle kit-assembly operations in SA. Indian company Mahindra says it is considering full local manufacture and Naamsa CEO Mikel Mabasa says three Chinese brands have expressed interest in doing the same. However, it will be some years before plans come to fruition so SA will remain a subservient trade partner of its allies for the foreseeable future.