MISA rejects proposed 50% tariff on Chinese and Indian vehicles, warns of job risks

Banele Ginindza

The Motor Industry Staff Association (MISA) has rejected a proposal by the Department of Trade, Industry and Competition (the dtic) to impose a 50% import tariff on Chinese and Indian vehicle brands, warning that the move could undermine recent gains in the local automotive sector and threaten jobs.

At a media briefing on the state of the local automotive industry on Thursday, MISA's communications manager Sonja Carstens said the union, which represents workers in a sector employing more than 300 000 people, was not consulted before the dtic presented the proposal to Parliament.

Carstens said MISA would make its own submission to the department within the next two days. She said the sector had been through a slump over the two years with dealerships, tyre manufacturers, and part manufacturers closing down.

"But that's changed due to the influx of the Indian and Chinese vehicle brands. We've seen record vehicle sales in October, November, December and even in January, and that's mainly to the Chinese and Indian brands," she said.

"Where we used to see one in every six vehicles being sold that is either Chinese or Indian, it is now down one in every four."

She noted that while the number of dealerships had declined by 41 since 2020, overall employment in the sector had grown steadily over the past three years.

Industry employment increased from about 305 000 to 309 000 workers by July last year, with the latest figures from the Motor Industry Bargaining Council (MIBCO) showing employment just under 311 000.

"So we are much bigger than the manufacturing industry, which also makes it important that this industry needs protection," Carstens said.

She also criticised the South African Automotive Masterplan (SAAM), arguing that it overemphasises manufacturing at the expense of the retail segment. According to MISA, the plan considers retail in principle but fails to adequately account for the impact on dealerships.

"If we start using tariffs, we are punishing the Chinese and Indian brands for importing vehicles into our country. We are saying that we are very much for local investment, we want to see them investing," Carstens said.

"The government can force that by, for instance, putting a timeframe that if you want to bring in your vehicles, we would like to see assembling vehicles at least in the next six months or start manufacturing parts locally. There are alternative measures that would not have an impact on our industry. The government would implement them."

On the extension of the Africa Growth and Opportunity Act (Agoa) by a further 12 months, which allows South Africa to export about 1 800 products including vehicles and components to the US duty-free, MISA urged government to adopt a neutral and pragmatic stance in its engagement with the US.

While supporting South Africa’s refusal to be “bullied” by US President Donald Trump, Carstens said maintaining constructive relations with the US was critical for the economy.

"We cannot exclude the economy of the US, it's very important for us. We would like to see the government taking a softer approach to the US and do everything within their means to rectify that relationship," Carstens said.

Carstens also provided an update on MISA’s legal dispute with the Motus Retail, saying the union was awaiting judgment on a second interdict application aimed at preventing further retrenchments pending a court ruling on changes to employee benefits.

The dispute follows Motus issuing retrenchment notices initially affecting about 900 workers, later reduced to 300 and then to 67 employees who were dismissed in January.

MISA is now challenging the impact of proposed wage and benefit cuts on the remaining 271 affected employees, including fleet car, fuel, travel and cellphone allowances.

"We have brought a second interdict to prevent Motus from retrenching anyone pending the court decision. We had our argument in court on Tuesday. Judgement was reserved, we are waiting for it as we speak, by tomorrow," she said.

"This is an excellent example of what employers are not allowed to do in our country. Motus is JSE-listed and reported R5.1 billion profit. The CEO got a R35 million bonus according to their financial reports. To come and present Motus Retail as a silo is unacceptable."

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