South Africa is considering new incentive measures for its automotive industry in response to the impact of U.S. President Donald Trump’s recent tariffs on imported vehicles, according to Trade, Industry and Competition Minister Parks Tau.
Speaking during an interview with Power FM on Thursday, Tau said the government is looking into expanding the Automotive Industry Production Plan as part of efforts to cushion the industry from the economic effects of the 25% import tariff imposed by the United States.
“We’re currently considering the possibility of expanding the Automotive Industry Production Plan to help mitigate the impact on our industry,” Tau stated, adding that officials are also exploring support for other sectors. “We’re currently modelling what the potential package could be for the auto sector, but also for other sectors so that we can do it within the means of the country to buffer the impact.”
The Automotive Production and Development Programme (APDP) currently supports the sector by providing rebates and duty refunds, alongside incentives tied to production volumes. It aims to stimulate investment, innovation, and job creation in the automotive space.
Industry representatives have voiced concern over the US tariff. The National Association of Automobile Manufacturers of South Africa warned that the cost of the levy cannot be absorbed by local producers, which could lead to higher prices for American consumers and a decline in the availability of South African-made vehicles.
The United States is South Africa’s third-largest automotive export market. In 2024 alone, South Africa exported approximately R35 billion ($1.8 billion) worth of vehicles to the US, making up 6.5% of the country’s total vehicle exports.