The South African automotive market is undergoing a transformation as Chinese and Indian vehicle brands capture significant market share, driven by competitive pricing and high-quality offerings. However, the long-term impact on the used car market remains uncertain, with industry leaders closely monitoring trends.
The South African automotive market is experiencing a seismic shift as Chinese and Indian vehicle brands gain significant traction among consumers. Showrooms for Omoda and Jaecoo, brands under the Chery umbrella, have sprung up in Nelson Mandela Bay, the country’s main automotive hub in the Eastern Cape.
The influx of ultra-competitive options from Chinese manufacturers such as GWM, Chery, Omoda, Jaecoo, Jetour, MG, JAIC, and BAIC has drawn consumers in droves, particularly toward their SUV offerings. WeBuyCars, South Africa’s largest pre-owned vehicle seller, noted in January that these brands have significantly altered consumer behavior and intensified market competition. Their success is attributed to attractive pricing and compelling new vehicle features, which have captured a notable market share.
Jebb McIntosh, CEO of Combined Motor Holdings (CMH), which operates 38 dealerships nationwide, echoes this sentiment, stating that the era of purchasing inferior Chinese vehicles for cost savings is over. Instead, consumers now favor high-quality, well-specified vehicles at competitive prices. McIntosh highlights that vehicles from India and China now constitute 55% of total sales in South Africa, with Indian brands like Suzuki, Toyota, and Hyundai accounting for 39% and Chinese brands for 16%.
However, a looming question remains: how will these vehicles perform in the used car market once they reach higher volumes? According to Naamsa data, over 160,000 vehicles from Chinese brands, along with Suzuki and Mahindra, were sold domestically last year. While not all Suzuki models originate from India, the majority do.
Additionally, Toyota and Hyundai models sourced from India contribute significantly to their respective sales figures. CMH, which owns First Car Rental with a fleet of over 9,000 vehicles, has observed that 15-18-month-old units are being sold at favorable prices, but the resale value of older vehicles remains untested.
McIntosh explains that used car prices typically rise with inflation in new car prices, but recent low or zero new car pricing has forced consumers to retain their used cars longer until resale values and finance debts align. WeBuyCars has also felt the impact of rising Chinese vehicle popularity, adjusting selling prices to maintain liquidity and inventory turnover, which has negatively affected margins. The luxury market has not been immune to these changes.
CMH reports that while the luxury segment has stabilized, albeit at lower volumes, dealer network rationalization continues. Over the past two years, manufacturers like BMW, Lexus, Volvo, Audi, and Mercedes-Benz have reduced their dealership numbers. Volvo’s shift to an electric future resulted in the most drastic cuts, with 60% of its dealership network closing. CMH, which once operated six Volvo dealerships, has trimmed this to four but has offset losses by adding non-competing brands.
Historically, CMH built its business on Nissan, Ford, and Volvo, but McIntosh notes that both Nissan and Volvo have seen alarming market share losses over several years. In contrast, Ford has reinvented its model lineup after discontinuing popular passenger models. Suzuki is now CMH’s top seller, with three other brands of Indian or Chinese origin—Foton, Mahindra, and Haval/GWM—in its top six by volume
South African Automotive Market Chinese Vehicle Brands Indian Vehicle Brands Used Car Market Luxury Car Market
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