South Africa’s vehicle manufacturers are not in favour of new-vehicle importers being “hammered” with an increase in import duties to 50%. Peter van Binsbergen, CEO of BMW Group South Africa and president of automotive business council Naamsa, said on Wednesday the World Trade Organisation (WTO) bound rate for import duties is 50% “but no one is asking for that from the industry side”. The bound rate is the maximum duty countries can impose.
Increasing import duties was mentioned in the portfolio committee meeting in the context of the South African market largely being serviced by imported vehicles, with only one in three cars sold in South Africa now being produced locally compared to two out of three vehicles previously. Van Binsbergen said Cawe was “just saying what is possible”. “That would be a shock and we don’t want a shock to the system because it often results in unintended consequences, the worst being affordability for the entry-level consumer who suddenly has a 50% duty put onto a car, or double the duty it has today.
We are not asking anything like that,” he said. Van Binsbergen said South Africa has import duties on completely built up (CBU) units or parts and these duties are part of the solution. But he stressed that the “50% number wasn’t in the room of the auto industry”. Van Binsbergen said the main objective of fine-tuning measures in the South African Automotive Masterplan (Saam) and the APDP is to make “real production” viable for more brands so they come to South Africa and become part of the solution.
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