South African auto firms, bracing for tariffs, face wage talks test

A potential deadlock over pay increases for South Africa’s automotive sector workers risks shutting down an industry that accounts for more than a fifth of the nation’s manufacturing output, weighing on an already moribund economy.

The National Union of Metalworkers of South Africa (Numsa), the country’s largest labour group, is demanding employers including BMW South Africa and the local units of Toyota Motor Corp and Ford Motor Co give workers 10% raises ahead of talks that will agree wages for the next three years.

While that’s more than three times the annual inflation rate, it’s the union’s lowest initial ask in at least four negotiation cycles and comes as several headwinds threaten the long-term viability of manufacturing vehicles and components locally.

They include: Heightened global uncertainty due to fears of a wider war in the Middle East and higher US tariffs; South Africa’s potential exclusion from a trade deal that gives African nations preferential access to the world’s biggest economy; a shift to