johannesburg, South Africa – A wave of closures is impacting South Africa’s vital automotive component manufacturing sector, with at least 14 factories shuttering their doors in 2025, according to the National Union of Metalworkers of South Africa (NUMSA). The closures are attributed to a complex interplay of factors including United States tariffs and increasing competition from lower-cost imports, placing thousands of skilled jobs at risk. This escalating situation is fueling a debate over the appropriate trade policies to protect South African industry.

Job Losses Mount in Key Automotive Regions

The affected companies primarily produce critical automotive parts, including tyres, seatbelts, and airbags. Irvin Jim, the General Secretary of NUMSA, revealed to Parliament’s trade committee that approximately 4,500 skilled workers have already lost employment as a direct result of these factory closures. The impact is being felt acutely in regions heavily reliant on automotive manufacturing, prompting concerns about broader economic repercussions. The trend is continuing into 2026, with the potential closure of ZEF Lifetec in Atlantis threatening an additional 300 positions.

nissan’s Rosslyn Plant Sale Highlights the Shift

The recent acquisition of Nissan’s Rosslyn manufacturing facility by Chinese automaker Chery South Africa has brought the industry’s vulnerabilities into sharp focus. Chery intends to purchase the land, buildings, and associated assets of the plant, including a nearby stamping facility. While Nissan Africa President Jordi Vila emphasized that most Nissan employees at the site will be offered continued employment under Chery, NUMSA expressed concerns about job security and a lack of consultation during the process. The union fears that not all positions will be preserved and temporary layoffs may occur during the transition.

Tariffs: A Contentious Solution

NUMSA is urging the government to implement higher tariffs on imported vehicles, components, and tires, arguing that such measures are necessary to level the playing field against subsidized Asian imports and restrictive US trade policies. Thay maintain that the current trade imbalance is unsustainable and hinders the potential for mutually beneficial trade within the BRICS economic alliance. However,the effectiveness of tariffs remains a point of contention,with some industry leaders warning against their potential to disrupt the market and raise consumer prices.

the Impact of US Tariffs and AGOA

While South Africa benefits from the African Growth and Possibility Act (AGOA) with the United States, steep tariffs imposed by the US have diminished those benefits for some exporters.Jendamark Automation, a Gqeberha-based company specializing in automotive manufacturing machinery, experienced a loss of $50 million in export contracts due to these increased tariffs. The company, a key supplier to major automotive brands such as Ford, BMW, and Volkswagen, illustrates the real-world consequences of protectionist measures.

here’s a snapshot of the current situation:

Issue Details
Factory Closures (2025) At least 14 component companies
Job Losses (2025) Approximately 4,500 skilled workers
Nissan Rosslyn Facility Acquired by Chery South Africa
Potential ZEF Lifetec Closures 300 jobs at risk
proposed Tariff Increase 25% to perhaps 50% on imported vehicles

Government Response and Future Outlook

The Department of Trade, industry and Competition is currently reviewing options to protect local manufacturers from increasing imports, especially from china and India. potential measures include raising import duties on fully built passenger vehicles to the maximum rate permitted under World Trade Association rules. Commissioner Ayabonga Cawe of the International Trade Management Commission (ITAC) indicated some versatility within existing global trade commitments. However, BMW South africa CEO Van Binsbergen cautioned that a heavy-handed approach to tariffs could inadvertently harm consumers and distort the market.

The future of South Africa’s automotive industry hangs in the balance. Navigating the complexities of global trade, managing tariff policies, and fostering a competitive manufacturing surroundings will be crucial to preserving jobs and ensuring the long-term sustainability of this vital sector.

What role should international trade agreements play in protecting local industries? And how can South Africa best position itself to compete in a rapidly changing global market?