Ramaphosa optimistic about auto industry amid US tariff deadline
With South Africa having less than a week to negotiate a tariff deal before the 1st August deadline hits, President Cyril Ramaphosa has hailed the auto industry in the country, saying it continues to 'drive investment, jobs and innovation'.
The announcement and anticipation of the US tariffs already had a devastating and immediate impact on trade performance, even before the tariffs were implemented.
Vehicle exports
Vehicle exports to the US dropped by 73% in the first quarter of 2025, followed by a further decline of 80% in April and 85% in May.
However, Ramaphosa remains optimistic.
Writing in his weekly newsletter on Monday, Ramaphosa said since the first assembly plants were established in the Eastern Cape in the 1920s, the auto industry has grown to become the 'largest manufacturing sector in the country'.
'South Africa's role in global vehicle manufacturing has expanded and grown.
'Auto companies like Toyota, Ford, Nissan, Volkswagen, BMW and Mercedes-Benz have plants here in our country that produce vehicles for the local market and for export to many other countries in the world,' Ramaphosa said.
ALSO READ: Ramaphosa responds to US' push for sanctions against SA leaders
BMW investment
Last week, Ramaphosa attended the launch of BMW's new X3 plug-in hybrid at the company's Rosslyn plant in Tshwane.
While concerns were raised about tariffs on BMWs, the marque's South African boss, Peter van Binsbergen, stated that the current uncertainty surrounding US tariffs being imposed on vehicle imports from South Africa and the renewal of the African Growth and Opportunity Act (Agoa) will not impact the group in the short term.
'Currently — this year and in next year's plan — there are no exports to the US in our production plan, which is fully maxed out on demand,' he said on Thursday.
Green mobility
Ramaphosa said South Africa is the exclusive global production site for BMW's new X3 plug-in hybrid.
He said that the shift from internal combustion engines (ICE) to hybrid and electric vehicles (EVs) in several markets means that green mobility is becoming increasingly important for automotive manufacturers.
'The latest investment by BMW, following their pledge at our South Africa Investment Conference in 2023, is a welcome signal to investors that South Africa remains a favourable place to do business.
'As government, we are working to ensure there is an enabling regulatory and policy environment to support the growth of this burgeoning industrial activity,' the president said.
Car manufacturing
Ramaphosa emphasised that government support to the car manufacturing industry through the Automotive Production and Development Programme will position South Africa as a 'key global manufacturing base for vehicles of the future'.
'Protecting existing jobs in the sector is paramount, particularly in the light of the looming US tariffs. The need to diversify our export base has become all the greater.
'We are committed to working with the sector to expand its continental footprint, building on the already strong growth of exports to the SADC region and leveraging the trade relationships that exist,' Ramaphosa said.
Ramaphosa added that amid these challenges, South Africa's auto industry is making the investments 'needed to build resilience, protect jobs and lead the way into a new era of green mobility'.
ALSO READ: Ramaphosa defends transformation: 'We must dispel the false notion'
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