{"id":822541,"date":"2025-04-29T16:54:46","date_gmt":"2025-04-29T14:54:46","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=822541"},"modified":"2025-04-29T16:54:51","modified_gmt":"2025-04-29T14:54:51","slug":"the-3-major-car-brands-closing-dealerships-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/motoring\/822541\/the-3-major-car-brands-closing-dealerships-in-south-africa\/","title":{"rendered":"The 3 major car brands closing dealerships in South Africa"},"content":{"rendered":"\n

Audi has joined BMW and Volvo in the decision to restructure its dealership network across South Africa due to the shrinking premium market and changes in buyer preferences. <\/p>\n\n\n\n

In a statement<\/a><\/strong> published in April, Audi noted the premium automotive sector has faced significant pressures in recent years.<\/p>\n\n\n\n

The automaker added that these pressures include a notable buying-down trend driven by high inflation, rising interest rates and exchange rate weakness.<\/p>\n\n\n\n

\u201cThis has intensified both affordability pressures on the consumer side and pricing pressures on the manufacturer side,\u201d said Audi. <\/p>\n\n\n\n

\u201cThis has prompted buyers to explore alternative options from new brand entrants primarily targeting the price-sensitive volume segment with well-equipped vehicles.\u201d<\/p>\n\n\n\n

Audi highlighted that the lack of a regulatory framework and supportive incentive schemes from the South African government exacerbates these challenges. <\/p>\n\n\n\n

\u201cThis is in contrast to the support available for battery electric vehicles (BEVs) in other developed countries, which could further enhance market growth,\u201d said Audi. <\/p>\n\n\n\n

The impacts of these market shifts are evident in the shrinking premium vehicle segment in South Africa. <\/p>\n\n\n\n

This is illustrated in the data<\/a><\/strong> from Lightstone Auto, which shows the premium vehicle sector has contracted to nearly a third of its size compared to a decade ago.<\/p>\n\n\n\n

In 2014, luxury brands such as Audi, BMW, Mini, and Mercedes-Benz collectively sold around 74,015 vehicles in South Africa.<\/p>\n\n\n\n

As of the end of 2024, this number had dropped to 23,881. This translates to a 68% drop in sales, highlighting the staggering number of South Africans who no longer consider these vehicles an option.<\/p>\n\n\n\n

In response to this market evolution, Audi announced that it has proactively started implementing an \u201coptimised footprint strategy in South Africa.\u201d<\/p>\n\n\n\n

Audi failed to comment on how many of its dealerships in South Africa would be affected by the new strategy. <\/p>\n\n\n\n

However, the Motor Industry Staff Association (MISA) told Engineering News<\/a><\/strong> that it is aware of at least four Audi branches that will close in the coming months.<\/p>\n\n\n\n

Despite these shifts, Audi South Africa noted that it remains committed to adapting to market conditions while ensuring premium service delivery to its customers.<\/p>\n\n\n\n

Audi is not the only premium manufacturer affected by shifts in the South African market. BMW and Volvo have also reduced their dealerships or announced similar strategies.<\/p>\n\n\n\n

BMW<\/h2>\n\n\n\n
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Over the past nine years, the luxury German car brand BMW has slowly reduced its dealership network in South Africa.<\/p>\n\n\n\n

In 2015, BMW reported 55 dealerships in South Africa. However, as of the end of 2024, this number stands at 46, revealing the closure of nine dealerships over the period.<\/p>\n\n\n\n

A BMW spokesperson explained<\/a><\/strong> that multiple factors contributed to the 16% reduction in its dealership network.<\/p>\n\n\n\n

They explained that the main factors included the country\u2019s current trading conditions, scaling down to service-only operations, and consolidation to achieve operating efficiencies.<\/p>\n\n\n\n

While all these reasons contributed to the reduction of its network, the increasing importance of affordability in South Africa\u2019s market is also a major contributor.<\/p>\n\n\n\n

BMW further explained that the exchange rate significantly contributed to the reduction in vehicle sales over the period.<\/p>\n\n\n\n

In 2013, BMW noted that the Rand to US Dollar rate hovered around R10.20\/dollar, compared to the current R18.26\/dollar.<\/p>\n\n\n\n

\u201cTherefore, all brands needed to increase vehicle prices above normal inflationary and production cost increases,\u201d the BMW spokesperson said.<\/p>\n\n\n\n

\u201cThis has placed the premium segment into a new price bracket, encouraging a buying-down trend.\u201d <\/p>\n\n\n\n

Volvo<\/h2>\n\n\n\n
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Volvo Cars South Africa (VCSA) has also confirmed<\/a><\/strong> that it plans to reduce its dealership network from 19 to just seven across the country.<\/p>\n\n\n\n

The manufacturer noted the move reinforces Volvo\u2019s commitment to electrification, digitalisation, and sustainability, prioritising a premium and consistent service through strategically located, high-performing dealers.<\/p>\n\n\n\n

As for the remaining dealerships, VCSA confirmed that its vehicles will still be available at four dealership groups: <\/p>\n\n\n\n