Thousands of jobs in South Africa’s automotive sector hang in the balance as the country prepares to lose preferential access to the United States market, a blow that workers and manufacturers say will land on top of an already painful stretch of factory closures and job losses.
The United States government has signalled it will end South Africa’s eligibility under the African Growth and Opportunity Act (AGOA) from January 1, 2027. For the people who build cars and components for a living, the change means South African products entering the US will no longer enjoy duty-free access and will instead face standard import duties, typically around 2.5% for automotive goods.
The National Association of Automotive Component and Allied Manufacturers (NAACAM) said the direct cost of losing AGOA was relatively modest compared with the 25% Section 232 tariffs already imposed on vehicles and components. But chief executive Renai Moothilal warned that the extra burden would further weaken the competitiveness of local manufacturers, and with it the livelihoods that depend on them.
“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,” he said. “Losing AGOA adds a further cost to an industry that has already absorbed a significant shock.”
The strain is already visible in the numbers. According to NAACAM, South Africa’s automotive exports to the US fell by 29%, from R28.67 billion in 2024 to R20.43bn in 2025, after the Section 232 tariffs were introduced. Direct component exports declined by 12.8% to R3.86bn, while light vehicle exports dropped by 31.7% to R16.57bn. The damage, the association said, extends beyond vehicle manufacturers to their domestic supply chains, where much of the workforce is employed.
Those supply chains have taken a beating. The component manufacturing sector has recorded 15 company closures and more than 7,500 gross job losses over the past three years, which NAACAM attributed partly to declining local content, production cuts at some vehicle manufacturers, weaker exports and rising operating costs.
For workers, the concern is that the industry cannot rely on a single customer abroad. The Motor Industry Staff Association (MISA) described the loss of AGOA as regrettable but stressed that South African vehicles would continue to be sold in the US, just without preferential duty-free access, meaning the decision does not amount to a trade ban.
Martlé Keyter, chief executive officer of operations at MISA, said members had already lived with the 25% tariff since April last year. She urged the government to use the 60-day notice period to motivate South Africa’s case for continued eligibility while pursuing alternative markets.
“The future of workers cannot depend on a single export market. Europe remains our largest export destination, while Africa presents our greatest growth opportunity. Trade with China and our BRICS partners must also be fair and balanced, ensuring that new trade agreements support jobs in South African factories rather than simply opening the country to increased imports,” she said.
MISA also called for support for affected businesses and workers, as well as negotiations on a sector-specific arrangement addressing the Section 232 tariffs. The association pointed to the still-significant commercial ties between the two countries, saying “why we continue to call for an automotive trade solution.”
The widening gap with competitors is a central worry. The UK, EU, Japan and South Korea have negotiated lower automotive tariffs with the US, leaving South African producers at a disadvantage. NAACAM said the current policy review presented an opportunity to introduce clearer localisation measures and help manufacturers diversify their export markets.
Moothilal argued that South Africa could not control the trade policies of export markets, but could act decisively at home. Growing domestically produced vehicle sales to South African consumers and significantly increasing local content, he said, were essential to supporting component manufacturers, protecting employment and reducing vulnerability to external shocks.
The record so far is uneven. The South African Automotive Masterplan 2035 set a target of 48.2% local content by 2025, worth about R101bn, yet local content stood at 39% in 2025, only slightly above the 38.7% recorded in 2015.
Economist Duma Gqubule called for greater focus on regional trade. “The hysteria around the loss of AGOA must stop. We must consider alternative markets. Our focus should be to develop a thriving regional economy by focusing on African trade,” he said.
BMW Group South Africa said AGOA had played an important role in integrating the country into global value chains. While BMW Group Plant Rosslyn does not currently export vehicles to the United States, any change to South Africa’s AGOA eligibility would have broader implications for the country’s automotive industry, the company said, noting that reliable market access and competitive trade conditions influence investment and production decisions across global manufacturing networks.
The stakes are underlined by the scale of two-way trade. NAACAM said South Africa and the US recorded R44bn in two-way automotive trade in 2025, with South Africa importing R20.6bn worth of US-made components, more than five times the value of its automotive exports to the US. Several US-headquartered companies also manufacture components in South Africa.
“South African components help keep US manufacturers competitive, and US components go into vehicles built here,” Moothilal said. “That symbiotic relationship was built over decades by companies on both sides and authorities should look to protect it and grow it.”
Whether the 60-day window is enough for South Africa to make its case in Washington, and whether the government moves quickly enough on localisation at home, may decide how many of those thousands of jobs are still on factory floors when the tariff-free era ends in January 2027.
Further details are available at https://thenational.co.za/news/2026-11-08-agoa-withdrawal-puts-south-africa-s-car-industry-and-thousands-of-jobs-at-risk/