Chinese car makers bet big on South Africa – and won
Chinese car brands are lapping up market share in South Africa thanks to a perfect storm of financial strain on consumers coupled with the value-for-money they offer – and other brands are taking a knock as a result.
When Chinese automakers such as Chery first entered the South African market in 2008, their low-priced vehicles failed to gain traction due to the lack of emphasis on producing high-quality cars.
This resulted in a poor reputation among car enthusiasts, particularly due to their low safety ratings – with most models receiving very low scores or none at all.
However, this trend is fast becoming a thing of the past as Chinese brands seem to be pulling ahead in the South African car market.
Over the years, the demand for notable Chinese brands such as Chery and Haval has increased significantly.
According to Naamsa, in 2019, Haval had only sold 872 cars, while Chery wasn’t even on the radar.
Fast-forward to 2024, Chinese cars are now outselling many traditional and trusted brands such as Kia, Renault, Isuzu, and even BMW and Mercedes-Benz.
According to Naamsa’s data, Havel has sold approximately 19,904 units, representing an increase of over 2,000% from that recorded in 2019.
Additionally, these numbers show a stark increase in Haval’s sales since 2019, representing a 198% increase, while Chery’s sales are likely to be in the same region.
Suzuki, a neighbouring Japanese car maker, has also seen tremendous growth, with their annual sales growing exponentially in the past decade from 6,402 to 47,201 – a 637% increase.
In contrast, Audi, Mercedes-Benz, and BMW have more than halved in the last decade – with total sales declining by 63% from 71,889 in 2014 to 26,202 in 2023.
This is unsurprising, as the national sales manager of Chery South Africa, Jay Botes, said that many South Africans are strapped for cash, given the high cost of living due to inflationary pressures – and Chinese brands offer good value for money.
The price of a Haval’s ranger-topper H6 SUV ranges from R492,050 to R679,950, while the Chery Tiggo 8 Pro ranges from R609,900 to R669,900.
In contrast, the cheapest Mercedes-Benz and BMW on the market are their hatchbacks, with a starting price of R820,959 and R691,072, respectively.
The sales figures of Chery and Haval represent these brands’ acceptance by South African car buyers, and Botes noted that the Chinese brands’ big play of striking an effective balance between quality, safety and price will continue to win over South African customers.
The buying-down trend can be seen clearly in the graph below – provided by Daily Investor – which compares the sales of Audi, BMW, and Mercedes-Benz versus cheaper alternatives such as Suzuki, Haval, and Chery.
The sales of the German automakers have steadily declined over the past decade, while Suzuki, Haval, and Chery sales have surged.
Daily Investor contacted Audi, BMW and Mercedes-Benz to find out why they thought the luxury car market had suffered such a severe decline in South Africa over the past decade.
BMW said the overall passenger car market has contracted significantly since 2014, and it, as a premium brand, has been impacted by this.
It said that due to the challenging economic environment in South Africa, a buying-down trend has emerged in the passenger car market.
The brand said that with increased imported vehicles from Asia, consumers have been spoilt for choice.
South Africans are under financial strain and choosing to buy down or not replace their vehicles at all, or much later than they usually would, the brand added.
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