South African car buyers could be facing a major shock as sweeping new tariff regulations are set to impact the cost of imported vehicles almost immediately. These changes, introduced by the Department of Trade, Industry and Competition (DTIC), aim to revise the current customs and excise structures on foreign-manufactured cars. But the real burden might fall on everyday consumers who rely on imported vehicles for affordability, variety, and advanced features.
For years, imported vehicles—especially those from Europe and Asia—have enjoyed relatively stable pricing due to existing trade agreements and favorable tariff conditions. However, the DTIC has now announced a recalibration of tariff categories, citing protection for local manufacturers and economic sustainability as primary reasons. These policy shifts are expected to take effect rapidly, with very little time for auto dealers and importers to adjust their pricing or stock levels. Industry experts have raised alarms, saying that the new tariffs could hike prices of imported cars by as much as 20% overnight. This could severely impact middle-income buyers who opt for mid-range brands like Toyota, Hyundai, or Volkswagen. For consumers already dealing with high inflation and rising fuel costs, a sudden increase in car prices could delay or cancel purchase plans entirely.
The implications of these changes are far-reaching: from increased loan amounts and higher monthly instalments to potential shifts in market share between imported and locally manufactured vehicles. As the new regulations begin to roll out, understanding their full scope and how they affect your purchasing power is more critical than ever.
What Are the New Import Tariff Rules?
The new tariff structure is designed to impose higher duties on fully assembled imported cars while encouraging local assembly and production.
- New regulations increase duties on Completely Built Units (CBUs)
- Lower tariffs for Semi Knocked Down (SKD) and Completely Knocked Down (CKD) kits
- Aimed at encouraging local assembly and job creation
- Tariffs vary based on origin and level of assembly
- Implementation started on 1 June 2025
Comparison of Tariff Categories Before and After
| Tariff Category | Previous Duty (%) | New Duty (%) | Impact Level | Affected Brands | Car Type Affected | Est. Price Increase | Notes |
|---|---|---|---|---|---|---|---|
| Completely Built Units | 25% | 40% | High | Toyota, Kia, Hyundai | Sedans, SUVs | 15-20% | Affects fully imported models |
| Semi Knocked Down | 15% | 20% | Moderate | BMW, Ford (some models) | Mid-range SUVs, Sedans | 5-8% | Assembled locally in part |
| Completely Knocked Down | 10% | 12% | Low | Mercedes, Isuzu | Premium cars | 2-4% | Minimal change |
| EV Imports | 18% | 30% | High | Tesla, BYD | Electric Vehicles | 10-18% | Affects EV rollout |
| Luxury Vehicles | 25% | 35% | High | Audi, BMW, Lexus | Premium Sedans, SUVs | 12-20% | High-income buyers impacted |
| Used Imports | 30% | 35% | Moderate | Various | All types | 5-10% | Tighter customs enforcement |
| Commercial Vehicles | 15% | 18% | Low | Nissan, Isuzu, Ford | Pickups, Vans | 2-4% | Minor increase |
| Local Production Kits | 5% | 5% | None | All | N/A | 0% | Encouraged by government |
Who Will Be Most Affected by the Price Hikes?
Consumers in the mid-income and entry-level segments are likely to feel the pinch first and hardest.
- First-time car buyers on limited budgets
- Middle-class families opting for foreign mid-range brands
- Ride-hailing drivers and small fleet owners
- Individuals considering switching to electric vehicles
- Dealers with unsold CBU inventory
Key Market Segments at Risk
| Buyer Segment | Impact Severity | Common Brands Used | Average Car Price | Expected Price Jump | Purchase Delay Likelihood |
|---|---|---|---|---|---|
| First-time buyers | High | Toyota, Kia, Suzuki | R200,000–R300,000 | R30,000–R60,000 | High |
| Young Professionals | Medium | VW, Ford, Hyundai | R300,000–R500,000 | R40,000–R70,000 | Medium |
| Fleet Owners | High | Nissan, Renault | R250,000–R450,000 | R25,000–R60,000 | High |
| EV Enthusiasts | High | Tesla, BYD | R600,000+ | R80,000+ | Very High |
| Luxury Buyers | Low | Audi, BMW, Lexus | R800,000+ | R100,000+ | Low |
How Will Car Dealerships Adjust to the New Reality?
Dealers are already recalculating their sales strategies, forecasting slower sales and customer pushback.
- Discounting current CBU stock to clear inventory
- Introducing financing deals to offset the price hikes
- Exploring partnerships with local assemblers
- Reducing imports and increasing domestic supply chain reliance
Dealership Actions Underway
| Strategy Type | Description | Goal | Estimated Timeframe |
|---|---|---|---|
| Clearance Sales | Markdowns on existing imported models | Reduce stockpile | 1–3 months |
| Credit Incentives | Lower deposits or interest rates on affected models | Maintain buyer interest | 3–6 months |
| Local Partnerships | Collaboration with local assembly operations | Lower import costs | 6–12 months |
| Digital Showroom Push | Online tools to compare cost changes over time | Improve transparency | Immediate |
What Should Buyers Do Now?
If you were planning to buy an imported vehicle in 2025, it’s essential to reconsider your timing and options.
Consider These Smart Buyer Moves
- Purchase before older inventory sells out under previous pricing
- Explore locally assembled or CKD options
- Consider fuel economy and resale value in your decision
- Talk to multiple dealers for competitive financing
- Delay your purchase until market stabilizes, if possible
Vehicle Types with Lower Tariff Impact
| Vehicle Type | Assembly Type | Est. Tariff Impact | Better Option For |
|---|---|---|---|
| Entry-level Hatchbacks | CKD or SKD | Low (2-5%) | Budget-conscious buyers |
| Light Commercial Vans | Partially assembled | Moderate (4-6%) | Small business owners |
| Mid-size Sedans | Local assembly | Low (3-6%) | Families, fleet owners |
| Electric Scooters | Low import components | Minimal (1-2%) | City commuters |
Government’s Rationale and Industry Pushback
The South African government claims the tariff increase will boost local industry and job creation.
Government Objectives
- Encourage foreign carmakers to invest in local plants
- Balance trade deficits caused by vehicle imports
- Stimulate skilled labour development
- Increase national automotive GDP contribution
Industry Response
- Auto sector groups say changes came too fast
- Complaints about limited consultation or phase-in time
- Warnings of potential consumer backlash and job losses
- Call for more government incentives on local production
Proposed Industry Solutions
- Phased implementation over 12–18 months
- Additional rebates for EV and green vehicles
- Tax relief on local assembly infrastructure
- More aggressive export incentives
FAQs about South Africa New Tariff Rules
| Question | Answer |
|---|---|
| When did the new tariffs take effect? | From 1 June 2025 |
| Are all imported vehicles affected? | Yes, but the extent varies by category (CBU, CKD, etc.) |
| Can I still buy at old prices? | Only if you buy from existing dealer stock imported before 1 June |
| Are electric vehicles affected? | Yes, EV tariffs increased from 18% to 30% |
| Will car loans become more expensive? | Likely, due to higher vehicle base prices |
| How can I avoid the impact of new tariffs? | Consider locally assembled models or buy before inventory changes |
| Is this change permanent? | Current legislation does not have a sunset clause, so it’s indefinite |
As South Africa’s car market enters a phase of sharp recalibration, prospective buyers need to be more informed than ever. Whether you’re buying your first car or adding another to your fleet, understanding how these new tariff laws affect pricing is critical to making a smart, timely decision. Speak with your dealer, review your budget, and monitor the shifting landscape closely. The changes are here, and they’re moving fast.