South Africa weighs steep tariffs on vehicles from China, India

South Africa is considering imposing tariffs of up to 50% on vehicles from China and India as it moves to protect its automotive industry from a flood of imports.

An internal review is being conducted by the Department of Trade, Industry and Competition to assess potential measures to stem inbound shipments, which policymakers say are undermining local manufacturing.

Among the options under consideration is an amendment to South Africa’s tariff schedule to bring import levies in line with World Trade Organization concessions for most-favored nations, Ayabonga Cawe, the commissioner of the country’s International Trade Administration Commission told lawmakers in Cape Town on Tuesday.

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“For completely built-up passenger vehicles, the bound rates there are at 50%, our duties at the moment are at around 25%,” Cawe said. “On components, there is some room to maneuver — depending on what the origin market is — of between 10% and 12%.”

China, India and South Africa are part of the BRICS group of developing nations, which has been working toward deepening trade ties between member nations.

Vehicles sourced from China and India — now the world’s two largest manufacturing hubs — accounted for 53% and 22% of South Africa’s total vehicle imports respectively in 2024.

The number of vehicles shipped from China has surged 368% over the past four year, and from India 135%. Competition has been fiercest in the entry-level segment of the market, with lower-priced imports compressing margins for domestic producers.

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The trade department is likely to consult the National Treasury on potential tax measures, including the introduction of excise duty on new luxury cars and a review of how rebate credit certificates function.