Low domestic sales, an influx of imported vehicles, and stagnant local content levels have forced 12 company closures and cost more than 4,000 jobs in South Africa’s motor industry over the past two years, Trade Minister Parks Tau said on Wednesday.

Speaking at an auto parts conference, Tau noted that South Africa produced 515,850 vehicles in 2024 — well short of the 784,509 target set under the South Africa Automotive Masterplan 2035. Imports now account for 64% of vehicle sales, while localisation — the proportion of local labour, assembly, and components — remains stuck at 39%, far below the 60% goal.

The minister warned that newly imposed U.S. tariffs are hitting the country’s R28.7 billion ($1.64 billion) automotive exports hard, with some manufacturers losing contracts. The industry directly employs about 115,000 people, including over 80,000 in component manufacturing.

In response, South Africa submitted a revised trade offer to Washington on Tuesday to reduce the 30% tariff introduced by U.S. President Donald Trump last week. Tau also announced that an incentive scheme for local manufacturing has been expanded to include electric vehicles and related components.

“Localisation is not merely policy compliance, it is existential,” Tau said, adding that a 5% increase in local content could unlock R30 billion in new procurement — far exceeding the R4.4 billion U.S. export market.

Global automakers such as Stellantis and China’s Chery are exploring local production, with Stellantis set to begin construction of a plant in the Eastern Cape.