17 April 2019

South Africa: Brexit, It Turns Out, Could Have Serious Consequences for the SA Car Industry - This Is Why


We are so amused. There's the old, colonial empire tripping over its own feet, laughably determined to have a deal, but unable to fashion a deal. They can't agree on what they disagree about. It's all kinda funny in a schadenfreudish sort of way. But it turns out, the Brits are not the only ones on the hook. SA's car industry is facing a serious threat. How could that possibly be? Read on.

South Africa's car and truck industry is currently worth about 8% of Gross Domestic Product, or somewhere in the region of R400-billion. About half the African continent's cars are made in SA, all by the operations of the seven huge multinationals that operate locally. So a threat to the industry is serious stuff.

That threat, according to XA International Trade Advisors director Donald MacKay, is "extremely serious". But how can that be, because surely this is an issue between the UK and Europe exclusively?

Welcome to the bizarre world international trade.

There are two big problems, says MacKay. The first is something called accumulation rules. At the moment, if you are exporting a car built in South Africa to Europe it enters duty-free if more than 60%...

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