The automotive industry has expressed confidence that it would be resilient enough to withstand the 25% import tariffs imposed by the Trump administration in the US as domestic new vehicle sales surged by 12.5% in March.

This comes after export sales for new vehicles recorded an impressive increase of 9 354 units, or 31.1%, reaching 39 477 vehicles in March, which is 15.7% higher than March 2023 exports.

The Automotive Business Council (Naamsa) on Tuesday said this marked the first export growth in 10 months, signalling renewed momentum in South Africa’s global trade position.

Domestic new vehicle sales also surged, with aggregate sales reaching 49 493 units - an increase of 5 504 units, or 12.5%, compared to March 2024 on the back of stable inflation and earlier monetary policy easing.

March new vehicle sales were the best since March 2023, nudging the 50 000-unit volume and marked six consecutive months of year-on-year growth and round out two optimistic quarters of growth for the South African motor industry.

Naamsa CEO Mikel Mabasa said March 2025 marked a pivotal month for South Africa’s automotive industry, demonstrating resilience amid economic pressures and delivering strong growth in both domestic new vehicle sales and exports.

Mabasa said that despite broader macroeconomic uncertainties, the industry proved its ability to thrive amid geopolitical shifts and sustain its long-term growth trajectory.

He said the surge in overseas demand for locally manufactured vehicles reaffirmed South Africa’s competitiveness in the global automotive market.

"The rebound in export sales is a testament to the resilience of South Africa’s automotive sector," Mabasa said.

"Despite ongoing global trade uncertainties, our industry remains steadfast, demonstrating its strength in navigating complex economic landscapes. Our export-led growth model continues to drive industrial expansion and job creation."

This export growth coincided with this week’s US presidential announcement threatening the future of South African exports, further underscoring the sector’s ability to withstand geopolitical shifts.

Last week, US President Donald Trump signed an Executive Order imposing a 25% tariff on imports of automobiles and certain automobile parts to address “threats” to the US national security under Section 232 of the US Trade Expansion Act of 1962.

As per the Executive Order, the duties will apply to all countries including those with free trade agreement with the United States, with exemption of countries party to the United States-Mexico-Canada Free Trade Agreement.

The implementation dates are 3 April 2025 for automobiles and not later than 3 May 2025 for automobile parts.

Brandon Cohen, national chairperson of the National Automobile Dealers Association (NADA), said the industry was cautiously optimistic about the sales rebound though they were concerned about the looming tariffs.

“With overall sentiment remaining constrained, we are adopting a cautious stance, particularly with the upcoming budget vote and potential US tariff announcements on the horizon,” Cohen said.

“The sustained demand for passenger vehicles is a positive indicator, but broader economic uncertainties continue to shape the outlook for the automotive sector.”

South Africa benefits from duty-free access to the US market under the African Growth and Opportunity Act (Agoa).

Previous Section 232 tariffs applied to foreign imports of steel and aluminium nullified the preferences that Sub-Saharan Africa countries enjoyed under the Agoa.

Automobile exports from South Africa accounted for 64% of South Africa’s exports under Agoa in 2024 and are therefore a significant component of products currently benefiting under the preferential programme.

US imports of automotive and automotive parts from South Africa was estimated at just over $2 billion; while US exports to South Africa were more than $1.1bn in 2024.

While South Africa’s exports to the US goes duty-free under Agoa; US imports into the South African market also enjoy rebates under the Automotive Production Development Programme.

Parks Tau, Minister of Trade, Industry and Competition, said South Africa’s exports of automobiles accounted for only 0.99% of US total automobile imports and 0.27% of auto parts, and thus do not constitute a threat to US industry.

“South Africa will seek a meeting with the United States authorities to discuss these developments, given potential negative effect on the South African economy. The department will also engage the automotive industry to discuss implications of these developments,” Tau said.

BUSINESS REPORT

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Export momentum sees SA automotive sector thriving despite looming US tariffs