Everything you need to know about South Africa’s under-revving motor industry

The wheels are still turning in South Africa’s motor industry, but various compounding factors have put the brakes on growth. 3Cube Property Solutions examines the various factors underpinning the industry’s sluggish performance. From increased competition and Trump’s tariffs to the potential loss of AGOA benefits and Numsa demands, the blows come from a jaw-dropping number of directions.

Increased competition from international vehicle manufacturers

In early 2025, Moneyweb reported that there has been a marked shift away from locally produced vehicles in favour of foreign brands. According to Toyota South Africa Motors (TSAM) president, Andrew Kirby, locally produced vehicle sales dropped considerably between 2018 and 2023. In the same period, the sale of Indian and Chinese vehicles increased in leaps and bounds.

Chinese brands like Haval and Chery have been well-known in the South African market for several years now. Recently, more brands hailing from the east are making their mark on local vehicle sales – such as Omoda, Jaecoo, Foton, BAIC and JAC. Independent Media reports that these manufacturers are making particular inroads in the SUV market.

The impact of Trump’s tariffs

If the buzzword for 2020 was “COVID-19”, then the buzz phrase for 2025 is “Trump’s tariffs”. It is expected that by July, South African motor companies will feel the full might of US President Donald Trump’s decision to impose a 25% tariff on automotive imports. Facing these tariffs means facing a variety of challenges, from higher production costs to increased market competition.

Our automotive exports to the USA have been a critical component of South Africa’s export portfolio, with the total value of vehicles and parts to the US estimated to be worth USD 2 billion according to All Things Motoring International.

Potential loss of AGOA benefits

A further blow to our motor industry has been dealt by President Trump, who seems unlikely to renew the African Growth and Opportunity Act (AGOA), which is set to expire in September 2025. Since 2000, this programme has allowed eligible sub-Saharan African countries to export various products to the USA without paying duties. Thanks to AGOA, some 6 800 US tariffs have been taken out of the equation.

Over and above Trump’s reticence to renew AGOA, South Africa’s future benefits from the Act were under threat. The Act is specifically designed to benefit low-income countries, and various stakeholders have pointed out that South Africa is a middle-income country.

Heavy demands from Numsa

In April 2025, the National Union of Metalworkers of South Africa (Numsa) demanded a 10% wage increase for employees in the motor industry. Numsa management pointed out that the cost of living in South Africa has skyrocketed and that low wages have forced many workers below the poverty line. Numsa spokesperson, Phakamile Hlubi-Majola, was quoted by Independent Media, explaining that the average metalworker spends 57% of their salary on transport and electricity.

What can be done to help the motor industry?

With our motor industry being pummelled by increased competition and rising costs, the question that needs to be asked is how the local industry can be helped. In late 2024, Siyabonga Mthembu, partner at BDO South Africa shared his insights into the challenges being faced. The first factor he points out is the need to focus on skills development. “We need to reinvigorate technical training in schools,” he commented. “We face shortages of essential trades such as fitters and turners.”

Mthembu also points out the role of government and policy, emphasising the need to reassess the enablers cited in the South African Automotive Master Plan, which will be in place until 2035. Government also needs to engage with US authorities and attempt to shift course – or at the very least, get clarity on AGOA’s future.

There are various forces at play which are preventing the local motoring industry from thriving. While the same may be true for your business, finding the right premises in Gauteng or the Western Cape need not be one of these challenges. Get in touch with 3Cube Property Solutions and let us find you the commercial, industrial or retail space that your business needs to thrive.