The rise of Chinese car brands in South Africa has been notable in recent years, with many Chinese automakers now outpacing legacy brands like Mazda, Land Rover, and Volvo.
Central to their success is their focus on affordability and value for money, key factors that are resonating with South African consumers amid challenging economic conditions.
In the first quarter of 2024, new vehicle sales in South Africa declined by 5.6% compared to the same period in 2023, although there was a slight 0.2% increase from the previous quarter.
Various industry experts attribute this decline to high interest rates, escalating fuel costs, and other economic pressures.
As a result, household finances have come under immense strain, with many South Africans struggling to keep up.
The DebtBusters Debt Index for the second quarter of 2024 reveals that the median debt-to-income ratio has remained high, stable at 105% for four consecutive quarters.
In comparison to 2016, consumers who applied for debt counselling in the second quarter of 2024 had 44% less purchasing power.
In this tough economic climate, many car buyers are opting for cheaper vehicles that offer greater value for money.
This shift in consumer behaviour has opened the door for Chinese carmakers to thrive, as they provide an affordable alternative to the more expensive premium vehicles.
Chinese brands are tapping into this demand for more budget-friendly options, and the results speak for themselves.
According to the National Automobile Dealers Association (NADA), consumers are increasingly turning to Asian car brands, especially those from China, to save money.
As of August 2024, 13 Chinese manufacturers are offering 34 different vehicle models in the South African market, including hatchbacks, sedans, crossovers, bakkies, and SUVs.
This growing presence has been fueled by popular brands like BAIC, Beijing, Chery, GWM, Haval, Jaecoo, and Omoda, all of which have capitalised on the buying-down trend.
Over the past four years, the number of Chinese vehicles sold in South Africa has surged dramatically.
In 2020, Chinese carmakers sold 7,611 vehicles, a figure that skyrocketed to 30,850 by 2023—a staggering 305% increase.
Haval and Chery have been leading the charge in this surge.
According to data from Naamsa, Haval sold approximately 19,904 units in 2023, representing a massive increase of over 2,000% from the 872 units sold in 2019.
Chery’s sales figures are likely in the same range, further highlighting the success of Chinese brands.
Suzuki, another Asian brand, has also enjoyed significant growth.
Over the past decade, sales of Suzuki vehicles in South Africa increased from 6,402 to 47,201—a 637% rise.
This further illustrates the trend of South African consumers seeking more affordable options as they downsize from premium brands.
The shift away from premium vehicles has been particularly stark.
Sales of luxury brands like Audi, Mercedes-Benz, and BMW have more than halved over the past decade.
In 2014, these brands sold a combined total of 71,889 vehicles, but by 2023, that number had plummeted to just 26,202—a sharp 63.5% decline.
Data from Lightstone shows that between 2022 and 2023, sales of Audi, BMW, Mercedes-Benz, and Volvo dropped by 6.6%, reflecting the broader trend of economic strain on the car market.
Audi’s sales, for example, fell from 18,375 units in 2014 to just 6,259 in 2023.
Alarmingly, year-to-date sales for these German car brands in 2024 show a further drop of over 10% compared to the same period in 2023.
Chinese automakers have not only taken advantage of this shift in consumer demand but have also managed to surpass some long-established brands.
Omoda and Jaecoo, two Chinese brands that made their debut in South Africa in 2023 and 2024, have already made a significant impact.
Omoda’s C5 crossover, introduced in April 2023, and Jaecoo’s J7 SUV, which followed a year later, are the only models available from their respective brands.
However, both brands are planning to expand their product lineups with additional models, such as the Omoda C9 and E5 and the Jaecoo J6 and J8.
Despite being new to the market, Omoda and Jaecoo have already seen impressive sales.
In July 2024, Omoda sold 224 C5 units, while Jaecoo sold 198 J7 units.
This brought their combined total to 422 units for the month, placing them 16th in South Africa’s auto market.
Remarkably, in just seven months, these two brands have managed to surpass nine other brands that have been in the country for much longer, including Mazda, Jaguar, Land Rover, Honda, Volvo, Porsche, and Subaru.
As South African consumers continue to face economic challenges, more are choosing to downscale and opt for cheaper, reliable vehicles.
Chinese automakers have stepped in to fill this gap, offering a wide range of budget-friendly options that appeal to a growing segment of the market.
With their expanding presence and growing sales figures, Chinese car brands are well-positioned to continue their upward trajectory in South Africa.
Read: The average cost of a car in South Africa in 2024 – and what you can buy with it
