Companies in South Africa’s automotive sector are exploring drastic measures—including shutting down local operations and relocating to other African countries—to avoid steep new US tariffs that threaten their competitiveness.
One such company, Gqeberha-based ROVD Engineering, says it has already lost hundreds of millions of rands since the tariffs took effect in August. The firm, which has operated in South Africa for 60 years, has halted expansion plans and is now considering moving production offshore to remain viable.
Workers Fear for Their Livelihoods
The impact extends beyond the boardroom, hitting employees like Nozipho Longo, an electrical engineer at ROVD. A former apprentice who climbed the ranks, Longo now fears for her family’s future.
“I’m so nervous,” she said. “I’m raising my sister’s kids, paying for school and university, and now we’re on short time—some weeks working just three days. If the company leaves, there’s no income. How will I feed my family?”
ROVD employs over 150 people, many of whom build assembly lines for car manufacturers. A closure would devastate the local workforce in a region where over 40% of South Africa’s automotive jobs are based. Economists warn that 100,000 jobs could be lost across the automotive and agricultural sectors due to the tariffs.
Tariffs Make Exports Uncompetitive
The new US tariff structure has sharply increased costs for South African exporters. Last year, ROVD shipped 120 containers to the US, spending R28 million on logistics. Today, the same shipment costs R33 million—an unsustainable surge.
“We’re competing globally, but the tariffs mean we’re not even shortlisted for quotes,” a company representative said. “Steel, which makes up 75% of our product, is now heavily tariffed. A single container’s cost jumped by R280,000 in just a week.”
Calls for Government Intervention
Affected businesses are urging the South African government to step in with subsidies to help them survive. Without intervention, more companies may follow ROVD’s lead—shutting down or moving operations to other African nations with better US trade terms.
For now, workers like Longo wait anxiously. “A lot of my friends are already jobless or on short time,” she said. “If this continues, what happens to us?”
As the automotive sector braces for further losses, the ripple effects could extend far beyond factory floors, threatening an already struggling regional economy.
