South Africa vehicle exports face mixed fortunes despite North America Growth
By Larry Claasen
VEHICLE exports to North America rose 41% for the first quarter of 2026 compared to the corresponding quarter of 2025, despite the trade tariffs imposed by the US.
Though the US trade tariffs continued to take their toll on local vehicle manufacturers, exports to Canada increased during the quarter, pushing up overall exports to North America. This is according to Naamsa’s Quarterly Review of Business Conditions: New Motor Vehicle Manufacturing Industry/Automotive Sector – 1st Quarter 2026.
The increase in exports to North America, from 1,894 to 2,675 units, should however be seen against the 7,070 units exported to the region in the first quarter of 2024, prior to the increase in tariffs.
AGOA expiry bites as Europe’s ICE ban looms large
Under the African Growth and Opportunity Act (AGOA), vehicles manufactured in South Africa could previously be exported into the US tariff-free. This came to an end on 7 August 2025, when a 25% tariff came into effect.
Naamsa said that while there were promising signs for exports to North America and Africa, which rose 32% to 9,115 combined, overall exports were down 10,3% to 87,536 for the period. South Africa’s global vehicle production market share decreased from 0,65% in 2024 to 0,64% in 2025, while its global vehicle production ranking remained at 21st for the quarter.
The biggest drop off was in exports to Europe, which fell from 79,737 to 69,298 units. Europe is a key market for local vehicle manufacturers, as exports to the European Union (EU) and the UK accounted for 80,3% – or four out of five vehicles, exported in 2025. The importance of Europe to the sector could also be seen in the fact that 56,8% of the light vehicles it produces are destined for the region.
Naamsa pleads for urgent policy clarity on 2035 timeline
The EU’s move to ban the importing of Internal Combustion Engine (ICE) vehicles is looming over local vehicle manufacturers and has left Naamsa concerned. It wants the government to provide policy certainty on the issue.
“The significance of Europe’s 2035 timeline to ban the sale of ICE vehicles, with countries such as Germany already implementing the ban from 2030 onwards, requires an urgent and strategic intervention on the part of South Africa’s supply- and demand-side automotive policies.”
Without policy clarity, the sector will struggle to make informed investment and employment decisions.
Record 2025 exports offer a silver lining
Despite the drop-off in exports for the first quarter of 2026, the sector enjoyed a 5,9% increase in exports to a record 414,271 units in 2025.
Naamsa said preferential trade agreements were central to South Africa’s export-led automotive model, as they enabled competitiveness, attracted foreign direct investment, sustained jobs, contributed to sector growth, generated foreign exchange earnings, and integrated the country into global and regional automotive value chains.
It added that the domestic automotive industry has materially benefited from the various trade arrangements over the past three decades, opening up certain markets in Europe, the US, and Africa, among others.
Local market shines with best Q1 since 2013, but global risks persist
Though there is uncertainty in the industry as a result of US trade tariffs and a lack of policy clarity on the EU’s coming ban on ICE vehicles, robust domestic demand is driving optimism in the sector.
“The new vehicle market during the first quarter of 2026 reflected the best first-quarter figures since 2013, with March 2026 reflecting an 18th consecutive month of growth,” said Naamsa.
It said improved consumer and business confidence, supportive inflation dynamics, the lagged benefits of cumulative interest rate reductions, as well as the ongoing influx of new entrants with affordable models, continued to benefit the new vehicle market.
Despite these green shoots, Naamsa warned that conflict in the Middle East may stoke inflation and “pose a significant stagflationary threat to the domestic economy”.
