Proposed tariffs on Chinese and Indian vehicles aim to boost local production and curb surging imports.
South Africa is considering imposing anti-dumping tariffs of up to 50% on vehicles from China and India as rising imports place pressure on the domestic 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. He noted that current duties on completely built-up passenger vehicles are around 25%, but World Trade Organization (WTO)-bound rates allow for increases of up to 50%.
The proposal comes amid growing dominance by India and China in the local market, with reports indicating that India and China now supply 53% and 22% of total vehicle imports, respectively.
Local producers expressed concern over declining domestic production and localisation. Imports now account for 55% of national vehicle sales, while sales of Chinese and Indian vehicles have surged 368% and 135% since 2020, respectively.
Shivani Moothilal, representing the National Association of Automotive Component and Allied Manufacturers (Naacam), said local production has stagnated below pre-Covid-19 levels at around 600 000 units annually, with forecasts of 560 000 units for 2026 and 2027.
“Local content has declined by an average of 1.1% per year over the past 25 years,” Moothilal explained, noting this has contributed to retrenchments and plant closures. Over the past three years, Naacam recorded 13 component company closures, with more expected in the coming year.
Industry leaders echoed the concerns. Toyota South Africa president, Andrew Kirby, highlighted the domestic market’s lack of scale, while BMW South Africa CEO, Peter van Binsbergen, warned that only one in three new vehicles sold are locally produced, compared with two in three previously.
Van Binsbergen added that the industry is vulnerable due to reliance on the UK-EU market, which absorbs 80% of South Africa’s new-vehicle exports but is 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.