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Domestic new vehicle sales are closely correlated with the overall performance of the economy and
confidence levels, on the part of business and consumers. South African vehicle demand is met by a range of imported and domestically manufactured vehicles. The country has one of the most competitive trading environments in the world, and in 2017 offered no fewer than 53 passenger car brands and 3 236 model derivatives for consumers to select from. This afforded car buyers the widest choice to market-size ratio anywhere in the world. Similarly, in the light commercial vehicle segment, for the same period, there were 34 brands, with 698 model derivatives to choose from. South Africa had a vehicle parc (number of registered vehicles) of 12.21 million at the end of 2017, of which 7.17 million or 58.7% comprised passenger cars. The average age of the passenger car parc in 2017 was 9 years and 6 months, and for the commercial vehicle parc, 9 years and 10 months. The vehicle ownership ratio in South Africa is in the order of 176 vehicles per 1,000 persons.
South African automotive industry is strengthening its global export footprint with the export values to 30 countries more than doubling on a year-on-year basis in 2017. The reach in respect of the number of destinations of total automotive exports (vehicles and automotive components) from South Africa remain high. Diversification into new emerging markets is a continuing trend and underlines the automotive industry’s competitiveness drive and a widening of the country’s traditional trading base.
The foundation of the South African automotive sector is based on the relationship between imports and domestic production as governed by the automotive policy regime in South Africa. The previous
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For instance, the South Africa-EU trade agreement resulted in import tariffs on EU goods that in many cases are much lower than tariffs on U.S. goods. For some products, exports from the EU enjoy a 10 percent to 15 percent tariff advantage compared to U.S. products. Key categories in which the U.S. faces a tariff disadvantage compared to the EU include cosmetics, distilled spirits, chocolate and confectionery products, plastics, textiles, trucks and automotive parts, fiber optic cable, agricultural equipment, and arms and ammunition. The U.S. highlights this disparity consistently in bilateral discussions with South Africa.
The International Trade Administration Commission of South Africa (ITAC) is authorized to prohibit specified classes of imports into South Africa by notice in the Government Gazette, unless the products
are imported in accordance with a permit issued by ITAC. ITAC requires import permits on used goods
if such goods are also manufactured domestically, thus creating a de-facto import ban on most used
goods, including used vehicles.
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