South Africa's automotive industry on edge as Agoa renewal uncertainty grows

AS THE African Growth and Opportunity Act (Agoa) faces uncertainty over its renewal in September, South Africa's automotive industry is bracing for turbulence, with experts on Tuesday warning of significant repercussions if the preferential trade programme is allowed to expire.

- YOGASHEN PILLAY

The Agoahas been a cornerstone for the country's automotive sector, providing duty-free access to the lucrative United States market. Without it, the local automobile landscape could face dire consequences.

Renai Moothilal, CEO of the National Association of Automotive Component and Allied Manufacturers (Naacam), stressed the critical role that Agoa has played in not just boosting export growth, but also attracting vital investments into South Africa's automotive sector over the past two decades.

"Agoa provides South African automotive component and vehicle manufacturers with preferential, duty-free access to the US market. This has not only supported export growth but also contributed to attracting investment into the sector," Moothilal said.

In 2024, South Africa exported an impressive R24 billion worth of vehicles and R4.3bn in components to the US, affirming the nation's position as the second-largest exporter of automotive components after Germany.