Auto industry urges ‘fine-tuned’ tariffs, not a 50% import hike

While the department of trade, industry and competition has warned that tariffs on completely built-up imported vehicles could rise from 25% to 50%, BMW Group South Africa chief executive Peter van Binsbergen says the automotive industry is not seeking such a large increase but rather targeted measures that encourage local vehicle production.

South Africa, a member of the World Trade Organisation, has a maximum legally committed tariff rate of 50% on completely built-up vehicles.

“Fifty percent would be a shock and we don’t want to shock the system because there’s often unintended consequences,” said Van Binsbergen. “The worst being affordability for an entry-level consumer who has double the duty put on a car. We’re not asking for that.”

The automotive industry was asking for “fine-tuning of the measures”, which would include an increased tariff, he said. 

“The main objective of that is we need to make real production in South Africa. Welding the body together, painting it and then assembling the vehicle here, but not screwdriver assembly like SKD [semi-knocked down] plants are doing. 

“Essentially, we need to make it viable for more brands to come to South Africa and then they become part of the solution.”

Van Binsbergen, who is also the president of the Automotive Business Council, said that would then bring in the manufacturer’s suppliers and create employment. 

This comes on the back of the rise in Chinese vehicle imports in South Africa, which have been experiencing a huge amount of growth in sales in the past year. 

Even though the BMW group reported 12% growth in South Africa in 2025 and continued its dominance in the premium vehicle segment, Van Binsbergen said no brand was immune to the impact Chinese vehicles were having. 

“It’s weird not sitting back and saying: ‘We’re premium; we don’t have to worry.’ We are studying these [Chinese] brands in great detail to analyse what makes them strong or not,” he said. “We are also focusing more on our strengths rather than others’ weaknesses. But it would be arrogant to say that we are immune to it.

“We had a record year, so I think strong brands are more resilient. It’s about the value proposition, not just the sticker price. Things like resale value, how you are looked after, parts availability. But it’s different for different brands and different consumers, so you can’t make a blanket-wide assumption.”

In 2025, Omoda Jaecoo announced that sales surged by 147% year-on-year in South Africa, with the brand accelerating past the 10 000 sales mark. 

Jetour also announced that it ranked in the top 15 for new vehicle sales in South Africa in 2025 and ranked 10th for the most new vehicles sold in December.

Chery and GWM have consistently remained in the top 10 brands for new vehicle sales throughout 2025.

In 2024, vehicle imports from China made up 22% of all vehicle imports into the country (up 368% from 2020). 

However, the success of the Chinese brands has affected legacy brands across the country. In January, the country’s largest dealer, Motus, laid off 86 employees and an additional 579 employees were affected. 

The Motor Industry Staff Association, which represents about 75 000 members, said that was one of the biggest retrenchments it had been involved in last year, after the influx of Chinese brands had caused severe pressure and competition in the motor retail industry.

Mercedes-Benz also slashed prices on selected SUVs, with two of them being reduced by R140 000. 

Last week, during a briefing to the parliamentary portfolio committee on trade, industry and competition, the department said it was reviewing measures, including higher import duties and excise taxes, to support the domestic automotive industry.

Deputy minister, Zuko Godlimpi, said the government’s hand “would be forced” and it would have to impose anti-dumping duties on imported vehicles. 

“It is not an affront on the relationship as such, but it is to tactically defend your employment capability in South Africa and the capacity of your industry to weather the storms – the storms being the general disruption of the auto sector globally – until we are in a position to produce new-energy vehicles competitively and maintain a degree of internal combustion engine [production],” Godlimpi said. 

The department is expected to present the measures by the end of February.

However, Nissan has announced that Chery had acquired its plant in Rosslyn, subject to the fulfilment of certain conditions. The manufacturer also announced that most of the associated Nissan employees had been offered employment by Chery SA. 

While the BMW group welcomed Chery to Roslynn, Van Binsberger said the conditions for the Chery group must be the same as well. 

“The government cannot allow them to come in on different conditions. SKD is a no-go, because then no suppliers will come. 

“To earn APDP [Automotive Production Development Programme] credits, you have to be level four BEE. As long as they do the same, they are 100% welcome because we can all improve South Africa’s conditions.”