The National Association of Automotive Component and Allied Manufacturers (NAACAM) notes the announcement by the United States government regarding its intention to end South Africa’s preferential access to the US market under the African Growth and Opportunity Act (AGOA) from 01 January 2027.
“South Africa’s automotive industry has been AGOA’s largest user, but for the sector the preference has already been largely overridden by the 25% Section 232 tariffs applied on vehicles and components,” says NAACAM CEO Renai Moothilal.
“Losing AGOA adds a further cost to an industry that has already absorbed a significant shock.” Following the introduction of Section 232 tariffs, South Africa’s automotive exports to the US fell by 29% from R28,67-billion in 2024, to R20,43-billion in 2025.
Direct component exports deteriorated by 12,8% to R3,86-billion.
Light vehicle exports fell by 31,7% to R16,57-billion, impacting not only domestic OEMs, but the entirety of their domestic supply chain too.
From January, these products will also pay the standard US import duty, typically around 2,5% for automotive products.
This widens the gap with competing producers in the UK, EU, Japan and Korea, which have negotiated lower automotive tariffs.
“The direct cost of losing AGOA is modest next to existing tariff measures, but in a globally competitive industry every percentage point counts,” says Moothilal.
The loss of AGOA comes on top of existing pressures on the component sector.
NAACAM has recorded 15 company closures and more than 7 500 gross job losses among component manufacturers over the past three years.
These were driven in part by declining local content,....
