In its newly released Automotive Trade Manual 2025, naamsa | The Automotive Business Council describes 2024 as "a taxing year".

The combined export value of vehicles and automotive components from South Africa dropped by R2-billion, or 0.7%, from the record R270.8-billion in 2023, to R268.8-billion in 2024.

Vehicle exports declined to 390 844 units, down from the record 399 809 units exported in 2023.

Automotive component exports were down by R3.5-billion, from R66.9-billion in 2023, to R63.4-billion in 2024.

Total vehicle production in 2024, at 599 753 units, was also well below 2023's 632 362 units.

Despite last year's declines, Naamsa notes that the domestic automotive sector remains the largest manufacturing sector in the country.

Vehicles and automotive component exports comprised 14.7% of total South African exports in 2024.

Also, a substantial 22.6% of value- addition within the domestic manufacturing output was derived from vehicle and automotive component manufacturing in 2024, while the broader automotive industry contributed 5.2% (3.2% manufacturing and 2% retail) to GDP.

The question, however, is what 2025 will look like for the domestic industry once the calendar turns to 2026.

Vehicle exports to end-May managed to inch ahead and were 1.4% ahead of the same period last year, following a slowdown in April and May on the back of some global fireworks and a local carmaker rejigging its Eastern Cape plant.

First-quarter domestic vehicle production decreased by 0.4% compared with the same period last year.

While the global economy had already started to show signs of strain towards the end of last year, Donald Trump's January inauguration as US President created an entirely new level of uncertainty as he started to wield tariffs as an economic weapon, including against South Africa, with far- reaching consequences.

A rapidly rising Chinese automotive industry also looms increasingly larger on the horizon.

Scramble for Markets

naamsa chief trade and research officer Dr Norman Lamprecht says one potential threat to the South African automotive sector in exceeding 2024's fairly healthy numbers is the fragmentation of the Government of National Unity, as was evident in its inability to agree on the 2025/26 Budget.

Such fragmentation impacts on businesses' planning processes, as well as consumer and business confidence.

As new-car sales are inextricably linked to economic growth, any action that threatens the domestic economy also acts as a minus sum on car and truck sales and production, adds Lamprecht.

Another threat would be the global trade policy landscape remaining trapped in a period of heightened uncertainty.

Concerns about high tariffs, coupled with a weaker rand exchange rate, could potentially delay further interest rate cuts, which could dampen the demand for new vehicles in South Africa.

This uncertainty could also negatively affect demand for new vehicles in South Africa's main export markets, as well as their affordability.

"Along with a tariff-led trade war, such as China retaliating against the US, geopolitical risk is anticipated to overtake inflation as the primary risk factor in 2025," notes Lamprecht.

"The automotive sector, which relies heavily on stable supply chains for components and raw materials, may see volatility in both costs and availability, necessitating continuous strategic risk management and the diversification of supply sources."

Lamprecht warns that high tariffs in the US will have a significant secondary impact around the world as South African exporters are likely to face increasing competition in their existing export strongholds from companies and countries desperately seeking new export markets.

What's Happening in the US?

It is almost impossible to provide an answer on the current trade situation between the US and South Africa that will still hold true tomorrow.

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