South Africa has an uncomfortable habit of having the same argument over and over again. We worry about imports. We talk about protecting local industry. We debate tariffs, incentives, and unintended consequences. And then, quietly, we carry on buying, licensing, and consuming offshore products while we lose local capability.
By Richard Firth, CEO of MIP Holdings
The current debate around vehicle imports is just the latest version of a very familiar story. Roughly one in three vehicles sold in South Africa is locally produced, and if you walk into a dealership, you’ll quickly notice how often the imported option costs more. So why aren’t we overwhelmingly choosing locally produced vehicles; models that support local jobs, skills and industrial capacity?
The answer is that over time, we’ve come to equate “international” with “better”, even when the economics and our long-term interests don’t support it. That tension was hard to miss at Davos, where despite very different ideologies, both Donald Trump and Mark Carney landed on the same reality: Economies that export jobs lose political support at home.
Risks and challenges
The South African government’s consideration of raising import tariffs on vehicles from 25% to as much as 50% has triggered predictable reactions. Manufacturers warn of affordability shocks. Trade unions warn of unintended consequences. Economists caution against blunt instruments.
Raising import duties to 50% won’t fix South Africa’s industrial problem. It just exposes how late the conversation has become. Tariffs are what you reach for when local capability is already weakened, industrial strategy has failed to scale, and government is reacting instead of shaping. We can’t ignore the fact that the deeper problem isn’t tariffs. The real challenge is that South Africa often ends up importing high-value components and IP, while local operations are limited to assembly, configuration, or distribution. Semi-knocked-down assembly may technically qualify as “local”, but it doesn’t build deep capability or durable competitive advantage.
This is the real risk. We absorb currency volatility, export demand, and slowly lose local skills, but we’re still convincing ourselves we’re participating in the value chain.
We have already seen this in the cigarette industry. British American Tobacco’s decision to shut down local production in favour of cheaper imports didn’t just cost jobs. It weakened regulatory oversight, fuelled illicit trade, and reduced local industrial capacity, all in the name of cost efficiency. Once local production disappears, rebuilding it is exponentially harder.
Doing the same things and expecting a different result
This same pattern has repeated itself in South Africa’s ICT sector for decades. International software vendors dominate public and private sector environments, while core platforms, systems, and digital infrastructure are routinely imported, even when capable local alternatives exist or could be developed. What makes this more concerning is that some international vendors continue to thrive locally despite well-documented governance failures, including bribery and corruption cases that would likely have ruined a local firm.
Software is no longer a support function. It underpins energy systems, financial services, healthcare, logistics, and government delivery. If we consistently outsource platforms and digital infrastructure, we’re not just importing technology, we’re exporting strategic control.
This isn’t an argument for isolationism or protectionism. It’s an argument for intentional capability building. Encouraging international firms to invest locally, build engineering teams, and develop IP in South Africa is far more powerful than penalising imports after the fact. Supporting local companies to scale, export, and compete regionally creates long-term economic value that tariffs never will.