Big shift in cars that hold their value in South Africa
Indian- and Chinese-built cars are redefining the South African automotive landscape, with affordability emerging as a driving factor behind a significant shift in vehicle value retention.
According to market intelligence group Lightstone, cars manufactured on the South Asian sub-continent from brands like Suzuki and Toyota, and other like French multinational automobile manufacturer Renault are set to outshine others in terms of holding their value.
This trend has been shaped by consumer choices, particularly in the under-R300,000 segment, which has become a focal point of the market.
Cars produced on the South Asian subcontinent accounted for an impressive 70% of the 108,000 light vehicles sold in South Africa for under R300,000.
Suzuki dominated this segment with a 43% share, followed by Renault at 19% and Toyota at 17%.
Lightstone’s residual value forecasting tool highlights the attractiveness of these Indian-built vehicles, predicting an average value retention rate of 86% for 2025.
For context, a car purchased for R300,000 in this category would still be worth approximately R258,000 after a year, assuming average mileage and maintenance.
This minimal depreciation, a mere 14% loss, underscores why Indian-built cars are capturing the attention of budget-conscious South Africans.
Close behind are locally manufactured vehicles, which boast a retention rate of 85.8%, showcasing the strength of South Africa’s domestic automotive industry.
Chinese-built cars are also making strides, with a projected retention rate of 83.9%, followed by South Korean vehicles at 83.6%.
These forecasts are provided that the vehicles are within the average mileage and condition parameters for their age.
These figures reflect a broader trend where affordability and quality are increasingly aligning, allowing a more diverse range of consumers access to durable and cost-effective vehicles.
The surge in interest in Indian- and Chinese-made vehicles comes against the backdrop of a challenging economic environment.
In 2024, South African car prices have risen at rates well above inflation, exacerbating affordability issues for many consumers.
Industry experts attribute these price increases to a combination of global and local factors, including supply chain disruptions, the depreciation of the rand, and rising input costs for materials and manufacturing.
Additionally, stringent emissions regulations and increased import duties have compounded the cost pressures, leaving buyers with fewer affordable options in the new car market.
This dynamic has made value retention an essential consideration for buyers.
Cars that hold their value well not only offer better returns when resold but also provide a buffer against the steep financial hit typically associated with new vehicle purchases.
Indian-built cars have emerged as a clear winner in this regard, blending affordability with strong resale prospects.
Their increasing popularity underscores a shift in consumer priorities, with South Africans placing greater emphasis on long-term cost-effectiveness.
Chinese-built vehicles are also gaining ground, thanks to improvements in build quality and competitive pricing strategies.
Once met with scepticism, these cars are now recognised as viable alternatives in a market where every rand counts.
The convergence of affordability and reliability in Indian and Chinese models is reshaping South Africa’s automotive landscape, offering a glimpse into the future of value-driven mobility.
As economic pressures persist, the appeal of cars that combine reasonable purchase prices with robust resale value is unlikely to diminish.
This trend marks a turning point for South Africa’s car market, highlighting the pivotal role of affordability in shaping consumer decisions and the broader automotive ecosystem.
Loading ...
