South Africa's automotive industry increased local content to 39% in 2025, but the figure remains below the South African Automotive Masterplan (SAAM) 2035 target of 48.2% for the year. According to the National Association of Automotive Component and Allied Manufacturers (NAACAM), the shortfall highlights the need for stronger localisation measures to protect the industry from external economic and trade pressures.
The 39% local content figure represented approximately R101 billion in locally produced automotive components and materials during 2025. While this is significantly higher in value terms than the R53 billion recorded in 2015, the percentage contribution has remained largely unchanged from the 38.7% achieved a decade earlier.
NAACAM CEO Renai Moothilal believes South Africa's most effective defence against global trade uncertainty is to strengthen its domestic automotive market and manufacturing base.
"South Africa cannot control the trade policies of export markets, but it can take decisive action to strengthen its own automotive manufacturing base. Growing domestically produced vehicle sales to South African consumers and significantly increasing local content are essential to supporting component manufacturers, protecting employment and reducing our vulnerability to external trade shocks," said Moothilal. He added that the ongoing policy review presents an opportunity to implement defined localisation measures while helping manufacturers diversify export markets.
The comments follow the announcement by the United States government that South Africa's access to the African Growth and Opportunity Act (AGOA) will end on 1 January 2027. From that date, South African automotive exports entering the US market will also be subject to standard import duties, typically around 2.5% for automotive products.
Although the additional tariff burden is relatively modest compared with existing trade restrictions, Moothilal noted that even small cost increases can affect competitiveness in the global automotive sector.
"The direct cost of losing AGOA is modest next to existing tariff measures, but in a globally competitive industry every percentage point counts," he said.
The industry has already experienced significant challenges following the introduction of 25% Section 232 tariffs by the United States. South Africa's automotive exports to the US declined by 29%, falling from R28.67 billion in 2024 to R20.43 billion in 2025.
Direct component exports to the US dropped by 12.8% to R3.86 billion, while light vehicle exports decreased by 31.7% to R16.57 billion over the same period.
NAACAM reported additional pressure on the component manufacturing sector, recording 15 company closures and more than 7 500 gross job losses over the past three years. The organisation attributed these challenges to declining local content levels, production reductions by some vehicle manufacturers, weaker export demand, including from the US market, and rising operational costs.
NAACAM continues to encourage engagement between South Africa and the United States and has long advocated for a mutually beneficial trade agreement. The organisation believes such an agreement should encompass trade, investment, skills development and technology transfer while addressing Section 232 tariffs on vehicles and components.
The United States remained South Africa's fourth-largest automotive trading partner in 2025, with total automotive trade between the two countries valued at R44 billion. During the year, South Africa imported R20.6 billion worth of components manufactured in the United States, more than five times the value of component exports sent to the US market. Several multinational component manufacturers headquartered in the United States also maintain production operations in South Africa.
