South Africa’s government is considering imposing antidumping duties on Chinese and Indian cars, which are threatening to displace local producers and decimate domestic component manufacturers.
Trade, industry & competition deputy minister Zuko Godlimpi told the portfolio committee on trade, industry & competition on Tuesday that the government “will have no choice but to impose antidumping duties against our own allies” in response to the surge of imported vehicles from India and China.
The two countries, with South Africa, Brazil and Russia, are founder members of the Brics trading bloc.
‘Tactical defence’
Godlimpi said that the measure is necessary “to tactically defend your employment capability in South Africa and the capacity of your industry to weather the storms”.
International Trade and Administration Commission of South Africa (Itac) chief commissioner Ayabonga Cawe confirmed that South Africa’s World Trade Organisation‑bound tariff rates provide scope for such action, with present duties on completely built‑up passenger vehicles at 25% against a bound rate of 50%.
The mooted antidumping duties come as research shows that the trade deficit between South Africa and its Brics partners has grown by $9.6bn.
The dire state of the local industry was laid bare before legislators by domestic producers who painted a picture of an industry on the ropes.
Legislators were told that imports now account for 55% of national sales with volumes from China rising 368% since 2020 and those from India up 135%.
The surge in imports has contributed to a stagnation in local production and a decline in component manufacturing, with 13 company closures and more than 4,000 job losses recorded in the past three years.
National Association of Automotive Component and Allied Manufacturers (Naacam) CEO Renai Moothilal said the Automotive Production & Development Programme (APDP) is “stuck in the mud”.
Moothilal said local production has stagnated below pre‑Covid-19 levels at about 600,000 units a year with forecasts of 560,000 units in 2026 and 2027.
Local content decline
He added that local content has 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 is now locally produced, compared with two in three previously.
Van Binsbergen cautioned that the industry is vulnerable due to its reliance on the UK‑EU market, which absorbs 80% of South Africa’s new‑vehicle exports but is rapidly transitioning to new energy vehicles.
The South African Automotive Masterplan is failing to meet its core objectives, parliament heard.
The department of trade, industry & competition confirmed that production, localisation and employment targets remain far below envisaged levels.
By 2025, the plan set out to achieve 931,000 vehicles produced, 60% local content and 224,000 jobs. Instead, the sector has delivered only 602,000 vehicles, 39% local content and 115,000 jobs, underscoring stagnation in the country’s largest sector in the manufacturing industry.
Imported vehicles dominate the lower‑cost segment, limiting access to locally produced cars. The department confirmed that it is reviewing the ad valorem tax formula on new vehicles to ease costs, but present structures continue to place pressure on consumers.
Employment effects are significant. The sector was expected to double jobs to 224,000 but instead remains at 115,000 with retrenchments in component plants and reduced opportunities for artisans.
Research shows that closures and reduced production have led to short-time work arrangements and declining job quality, affecting household incomes and stability.
Service and safety are also affected. The Retail Motor Industry noted that the aftermarket, which contributes more than 54% of vehicle value-add (R202.6bn) and absorbs 70% of jobs (270,000), is excluded from the master plan.
Artisan numbers have declined 31% over the past decade, resulting in longer repair times, higher costs and reduced compliance with roadworthiness standards.
Localisation falters
The committee heard that the failure to meet master plan targets is not only an industrial policy issue but one with direct consequences for households: higher car prices, fewer jobs, and weaker repair and safety systems. These outcomes reflect the stagnation in localisation and the growing dominance of imports in the domestic market.
The trade, industry & competition department’s automotives chief director, Mkhululi Mlota, acknowledged that localisation remains stagnant and that the review of the APDP has “been a bit slow”.
He confirmed that proposals on tariffs, ad valorem tax adjustments and structural reforms to encourage localisation will be finalised for ministerial consideration by end-February.
He further noted that implementation of the white paper on electric vehicles is ongoing with amendments to include hybrids under development and that a battery manufacturing policy is expected by March.
The committee heard that while exports reached 408,224 vehicles, worth R205.4bn, in 2025 this masks structural weaknesses. Employment remains far below the doubling envisaged and local content has not advanced beyond the 39% baseline.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.