South Africa’s auto sector faces 4,000 job losses and plant closures as imports surge and U.S. tariffs hit exports.

South Africa’s automotive sector has lost more than 4,000 jobs and seen 12 company closures over the past two years due to low domestic sales, rising imports, and minimal local content in production, Trade Minister Parks Tau said on Wednesday.

Speaking at an auto parts conference in Gqeberha, Tau revealed that just 515,850 locally produced vehicles were sold last year, well below the South African Automotive Masterplan 2035 target of 784,509. Imports now account for 64% of domestic vehicle sales, while localisation remains stuck at 39%, far short of the 60% goal.

The industry, which employs 115,000 people directly, is also reeling from U.S. tariffs that came into effect in April, hitting the country’s 28.7 billion rand ($1.64 billion) automotive export market. Tau warned that the new 30% U.S. tariff on cars and parts could cost more jobs as manufacturers lose contracts.

On Tuesday, CBI News reported that South Africa submitted a revised trade deal proposal to Washington in a bid to ease the tariffs. The government has also expanded its manufacturing incentive scheme to include electric vehicles and related components.

Tau stressed that increasing local content is critical, noting that a 5% boost could generate 30 billion rand in procurement, far surpassing the value of the U.S. export market. Global automakers like Stellantis and Chery are exploring local production, with Stellantis set to break ground in the Eastern Cape.