SA auto industry against 50% duty ‘hammer’ on imported vehicles

South Africa’s vehicle manufacturers are not in favour of new-vehicle importers being “hammered” with an increase in import duties to 50%.

Peter van Binsbergen, CEO of BMW Group South Africa and president of automotive business council Naamsa, said on Wednesday the World Trade Organisation (WTO) bound rate for import duties is 50% “but no one is asking for that from the industry side”.

Read:
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The bound rate is the maximum duty countries can impose.

Van Binsbergen was commenting about a possible increase in the import duty on new vehicles following comments made by International Trade Administration Commission (Itac) Commissioner Ayabonga Cawe to parliament’s Portfolio Committee on Trade, Industry and Competition on Tuesday.

Increasing import duties was mentioned in the portfolio committee meeting in the context of the South African market largely being serviced by imported vehicles, with only one in three cars sold in South Africa now being produced locally compared to two out of three vehicles previously.

Van Binsbergen said Cawe was “just saying what is possible”.

“What the industry is looking for is a fine-tuning of all the levers within APDP [Automotive Production and Development Programme] and not just one big hammer, which would be 50%.

“That would be a shock and we don’t want a shock to the system because it often results in unintended consequences, the worst being affordability for the entry-level consumer who suddenly has a 50% duty put onto a car, or double the duty it has today. We are not asking anything like that,” he said.

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Van Binsbergen said South Africa has import duties on completely built up (CBU) units or parts and these duties are part of the solution.

But he stressed that the “50% number wasn’t in the room of the auto industry”.

Aim must be to encourage vehicle brands to manufacture in SA

Van Binsbergen said the main objective of fine-tuning measures in the South African Automotive Masterplan (Saam) and the APDP is to make “real production” viable for more brands so they come to South Africa and become part of the solution.

He said “real production” involves welding the vehicle body together and then painting and assembling it “and not screwdriver assembly like SKD [semi-knocked down] plants are doing”.

Van Binsbergen said there has to be an attractive business case by adjusting the Saam and APDP levers.

“There might be a lever that is a change of duties, but there are levers we have proposed which will also give local producers an advantage to be able to make vehicles even more attractive to the consumers and not make it harder for an importer, but make our business case more attractive.

“There are only seven manufacturers in South Africa today despite Chery replacing Nissan, but we need to have 10 or even more brands producing locally because they bring their suppliers and then the job creation really begins to flow.

“And with job creation comes economic growth and the virtuous circle,” he said.

Read: Mahindra looking into establishing a CKD assembly plant in SA

Van Binsbergen said this is why the domestic manufacturers have asked the Department of Trade, Industry and Competition (dtic) to close the SKD loophole that allows these manufacturers to operate “close to duty-free”.

He said SKD manufacturers are achieving this by using aftermarket categories to import the engine, for example, duty-fee.

“They are actually having a very easy time in South Africa without creating any investments and hardly creating any jobs.

“But we are asking for small adjustments, not for the big hammer approach,” he said.

Van Binsbergen said some vehicle brands have been much harder hit than others but no brands are immune from the impact of imports.

The majority of imports that are disrupting the South African market are from China and India.

Read:
The stunning rise of Chinese SUVs in South Africa
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Van Binsbergen stressed the importance of keeping the entire vehicle ecosystem running.

“If you kill the used-car market through some very cheap imports, you might affect all the other consumers out there who can’t get rid of the car they are in today.

“So you really need to look at the unintended consequences of the measures you take and think about the big picture.”

Van Binsbergen said it seems as if things have gone quiet between the dtic and the US, but the industry has stressed the need to continue discussions with the US.

He said the Africa Growth and Opportunity Act (Agoa) is not the answer but the 25% Section 232 duty on imports “has to go”.

Van Binsbergen said the US is an important market for components and vehicles from South Africa – about 25 000 vehicles were exported to the US in 2024, which basically evaporated in 2025.

He said BMW was not affected by this, but component manufacturers are heavily affected and the minute you take away that economies of scale from component manufacturers, it raises questions about their viability in South Africa.

“We need the US market for the South African industry. We used to export to the US, and maybe one day we will want to again so we need to have access to that market. It’s an important market,” he said.

BMW doing well

Van Binsbergen said the BMW brand grew 12% year-on-year in 2025 and was the clear leader in the premium segment with 46% market share.

“We comfortably outsold our two closest competitors combined,” he said.

“The Mini brand grew by 4%, which was strong growth in a very competitive sub segment that Mini competes in.”

The battery electric vehicles (BEV) offering by Mini grew by more than 50% in 2025, which put Mini in second place in the BEV market despite it being a relatively small brand in the marketplace.

He said combined BEV sales by Mini and BMW accounted for 48% of BEV sales, making it number one in this segment.

Read: BMW SA ‘not exposed’ to current US tariff uncertainty

Danny Bester, director of BMW Group Plant Rosslyn, said the plant produced more than 79 000 units in 2025, the highest volume produced in the plant in 52 years, which allowed it to maintain its three-shift operation that was previously at risk.

Bester said 88% of the plant’s production went to Europe, and 40% of the production was plug-in hybrids and 60% a combination of petrol and diesel internal combustion engine vehicles.

Listen to Jimmy Moyaha’s interview with Itac Commissioner Ayabonga Cawe in this SAfm Market Update with Moneyweb podcast:

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