South African Auto Industry Seeks Trump’s Support for AGOA

The automotive industry in South Africa holds a positive outlook regarding 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 assert that Agoa “is already gone,” the automotive sector remains hopeful about persuading the U.S. administration to extend the agreement past its termination in September 2025. “We are optimistic for a significantly improved outcome,” he stated.

Read: Tariffs have effectively nullified Agoa – Tau

Mabasa recognized during a press conference at the unveiling of the 2025 Automotive Trade Manual that U.S.-South Africa trade relations “are clearly a moving target.”

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

Mabasa pointed out that Naamsa has already consulted with Mcebisi Jonas, the president’s special envoy to the U.S., who has sought input from the industry regarding the trade and tariff challenges currently faced.

He indicated that Naamsa plans to provide information to Ramaphosa’s office to underscore the importance of the U.S. market for South Africa’s automotive industry.

“We are fully committed to maintaining our vehicle exports to the U.S.,” he stated.

“It’s a highly appealing market, and we aim to ensure our continued efforts there.”

Mabasa added that Naamsa is working closely with partners and government colleagues to advocate for the extension of the Agoa agreement.

Export volumes and tariffs

Total automotive exports from South Africa to the U.S. were valued at R28.67 billion in 2024, as per the 2025 Automotive Trade Manual.

This placed South Africa as the third most significant automotive exporter in 2024, behind Germany and Belgium.

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

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These tariffs will eliminate the duty-free access currently enjoyed by South African automotive exports under Agoa.

The tariff on vehicles was implemented on 3 April 2025, while the effective date for the tariff on auto components and parts was anticipated to be announced at the beginning of this month.

Tariff issue ‘fluid and volatile’

Naamsa’s chief trade and research officer, Norman Lamprecht, voiced concerns about the U.S. tariff environment, highlighting its fluidity and volatility.

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

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He believes the South African automotive sector should continue to push for the continuation of Agoa, even though local original equipment manufacturers (OEMs) have already adjusted to current conditions and developed contingency plans.

Lamprecht recalled that the previous U.S. administration had intended to extend Agoa for an additional 16 years, until 2041.

The manual highlighted that as an export-driven sector, South Africa’s automotive industry has faced significant challenges since 2024, with the unpredictability of rising tariffs and a potential trade war introducing chronic uncertainty.

“Unlike past crises, the long-term effects of these tariffs are unclear, complicating production planning and investment decisions that typically span many years.

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

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

It emphasized that the automotive industry plays a vital role in the economy, where exports are essential for achieving higher production volumes and benefits from economies of scale.

Read: SA auto industry achieves R21bn positive trade balance

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

Chinese vehicle influence

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

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

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

She noted that multiple global manufacturers are positioning India as a production hub for small vehicle facilities, with the majority of imported vehicles from India falling within the small car and entry-level segments.

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Mamogobo observed that the growing demand for affordable vehicles has created new opportunities for brands entering the domestic market, offering consumers a broader selection.

“South Africa embraced no fewer than six distinct Chinese brands in 2024, in addition to three brands launched in 2023.

“In total, there were 14 different brands from China operating in the local new vehicle market in 2024, with even more expected in 2025,” she stated.

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

Read: SA auto industry faces threat from shift towards imported vehicles

He mentioned that Naamsa is actively collaborating with the Chinese brands in the South African market, some of which have expressed interest in establishing completely knocked down (CKD) production operations in the country.

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

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

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