{"id":830080,"date":"2025-07-07T07:00:00","date_gmt":"2025-07-07T05:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=830080"},"modified":"2025-07-07T06:56:00","modified_gmt":"2025-07-07T04:56:00","slug":"the-survival-of-these-businesses-under-threat-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/motoring\/830080\/the-survival-of-these-businesses-under-threat-in-south-africa\/","title":{"rendered":"The survival of these businesses under threat in South Africa"},"content":{"rendered":"\n

The survival of smaller or independent car dealerships is under threat in South Africa due to shrinking margins, global competition, and shifts in consumer behaviour.<\/p>\n\n\n\n

This is according to Thembinkosi Pantsi, Vice Chairperson of the National Automobile Dealers’ Association (NADA), who warned<\/a> that these businesses are under siege in South Africa.\u00a0<\/p>\n\n\n\n

\u201cSmaller independent dealers are under severe pressure in terms of the margin squeeze that we\u2019re seeing in the industry. Customer footfall is not where we\u2019d like it to be, and overheads remain high.\u201d<\/p>\n\n\n\n

According to Pantsi, these pressures are compounded by South Africa\u2019s sluggish economy, which continues to weigh heavily on businesses that don\u2019t have the same buffers and support structures as larger dealer groups.<\/p>\n\n\n\n

Unlike their corporate counterparts, independent dealerships lack the financial reserves, JSE listings, and access to low-cost funding that help bigger players weather tough economic conditions. <\/p>\n\n\n\n

\u201cCash flow is critically important for independent dealers. And when sales dip or margins tighten, that becomes a very real problem,\u201d said Pantsi. <\/p>\n\n\n\n

While May 2025 brought some much-needed relief with new vehicle sales increasing by 22%, Pantsi said this improvement must be seen in context. <\/p>\n\n\n\n

He pointed out that the overall trend over the past few years has been downward, particularly in new car sales. <\/p>\n\n\n\n

One of the industry’s biggest changes is how consumers buy cars. Pantsi noted that the traditional in-dealership experience, where buyers walk in, explore models, sit in the cars, and speak to sales reps, is fading. <\/p>\n\n\n\n

\u201cPeople no longer walk into dealerships. They do their research online. They know exactly what they want, sometimes right down to the specs and price, before they even engage with a dealer,\u201d he said. <\/p>\n\n\n\n

Platforms like AutoTrader and WeBuyCars have capitalised on this digital shift and, according to Pantsi, pose a real challenge for smaller dealers. <\/p>\n\n\n\n

\u201cThe larger players with deeper pockets have gone aggressively into technology and the e-buying of cars,\u201d he said. <\/p>\n\n\n\n

\u201cIndependent dealers are having to respond by embracing online platforms and technology-driven solutions to stay relevant.\u201d<\/p>\n\n\n\n

Adapt or die <\/h2>\n\n\n
\n
\"\"<\/a>
Thembinkosi Pantsi, Vice Chairperson of the National Automobile Dealers’ Association (NADA)<\/em>.<\/figcaption><\/figure><\/div>\n\n\n

Another disruptor in the market is the entry of Chinese car manufacturers, which Pantsi said are changing the game entirely. <\/p>\n\n\n\n

\u201cThe Chinese brands have really shaken up the local market,\u201d he said. \u201cFor consumers, they offer an excellent value proposition that\u2019s hard to ignore. <\/p>\n\n\n\n

\u201cAnd you\u2019re now seeing them setting up shop right next to luxury brands like Land Rover and Jaguar in the richest parts of Johannesburg.\u201d<\/p>\n\n\n\n

While cheaper new vehicles are a threat to small dealerships, there\u2019s also a potential upside for them. <\/p>\n\n\n\n

Some Chinese brands, Pantsi explained, are more open to working with smaller dealers and even support multi-franchise models, where one dealer can offer multiple brands under one roof.<\/p>\n\n\n\n

 \u201cThat\u2019s something we\u2019re already starting to see, and it could help diversify revenue streams,\u201d he said. Despite the challenges, Pantsi believes this is also a time of opportunity. <\/p>\n\n\n\n

\u201cThis is an exciting time. It stretches our capabilities and forces us to innovate. Dealers are starting to build what we call \u2018dealers of the future\u2019,\u201d he said.<\/p>\n\n\n\n

Pantsi pointed to international examples like the UK, where some companies have adopted car vending machines. <\/p>\n\n\n\n

\u201cYou go, insert a token, and your car is delivered to you with no human interaction. That\u2019s the kind of innovation we\u2019re not ruling out in South Africa.\u201d<\/p>\n\n\n\n

But alongside technological innovation comes the need for workforce transformation. As electric vehicles become more common, the demand for traditional mechanics is expected to drop. <\/p>\n\n\n\n

\u201cEVs don\u2019t have engines in the traditional sense. We won\u2019t need as many traditional technicians but more people with electrical and tech skills. The jobs won\u2019t vanish; they\u2019ll just change.\u201d<\/p>\n\n\n\n

Pantsi added that the sector will need to keep evolving. \u201cThe automotive industry contributes nearly 6% to South Africa\u2019s GDP,\u201d he said.<\/p>\n\n\n\n

 \u201cIt\u2019s too important to fail. But we must adapt. That means embracing technology, reskilling the workforce, and finding new ways to serve a changing customer.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Shrinking margins, global competition, and shifts in consumer behaviour are threatening the existence of some businesses in South Africa. <\/p>\n","protected":false},"author":92,"featured_media":830093,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11119],"tags":[23004,17961,853],"class_list":["post-830080","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-motoring","tag-independent-car-dealerships","tag-national-automobile-dealers-association-nada","tag-south-africa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/830080","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/92"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=830080"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/830080\/revisions"}],"predecessor-version":[{"id":830095,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/830080\/revisions\/830095"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/830093"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=830080"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=830080"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=830080"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}