South African motorists who care about the resale value of their vehicles have been warned that cheaper new Chinese cars are putting pressure on used-vehicle prices.<\/p>\n\n\n\n
The trend is highlighted in FirstRand\u2019s 2026 annual report, which showed that the rapid arrival of lower-priced vehicles has become a financial risk for WesBank, one of South Africa\u2019s largest vehicle financiers.<\/p>\n\n\n\n
WesBank\u2019s normalised earnings fell 20% to R1.394 billion in the year ended June 2026, from R1.739 billion the previous year. Profit before tax also declined 20% to R1.909 billion, despite strong growth in vehicle finance.<\/p>\n\n\n\n
Core lending advances increased 13% to R212.686 billion, while retail vehicle asset finance new business volumes grew 18%. Net interest income increased 5% to R6.347 billion.<\/p>\n\n\n\n
However, credit impairments worsened, increasing 26% to R2.604 billion. The credit loss ratio increased to 1.30%, from 1.15%, while Stage 3 non-performing loans rose to 4.83% of advances.<\/p>\n\n\n\n
The biggest pressure was felt in WesBank\u2019s retail vehicle asset finance business, where profit before tax fell 35% to R1.016 billion.<\/p>\n\n\n\n
Additionally, corporate and commercial profit before tax increased 8% to R893 million. The bank directly linked some of the pressure to the changing vehicle market.<\/p>\n\n\n\n
“Chinese car brands are entering the market rapidly, offering advanced technologies, electric and hybrid options, and competitive pricing,” WesBank said.<\/p>\n\n\n\n
It added that it had partnered with several Chinese brands through supplier and dealer agreements, which helped drive growth in advances.<\/p>\n\n\n\n
However, for motorists, the increased supply of cheaper new vehicles has created a depreciation problem.<\/p>\n\n\n\n
When consumers can buy a new vehicle with more features at a competitive price, older vehicles can become less attractive.<\/p>\n\n\n\n
This can reduce the prices buyers are willing to pay for used cars, putting pressure on the resale value of vehicles already on South African roads.<\/p>\n\n\n\n
The effect is already being felt by WesBank\u2019s Fleet Management and Leasing business.<\/p>\n\n\n\n
“The pressure reflects weaker used-vehicle prices following stronger new-vehicle supply and lower-priced market entrants,” WesBank said.<\/p>\n\n\n\n
WesBank Financial Highlights Table (2026 vs. 2025)<\/p>\n\n\n\n The decline in used-car values also creates a risk for banks financing vehicles. A vehicle serves as collateral for a loan, meaning that if a customer defaults, the lender may repossess and sell it to recover some of the outstanding debt.<\/p>\n\n\n\n If the vehicle is worth less than expected, the bank can recover less money, increasing its loss if the customer defaults.<\/p>\n\n\n\n WesBank therefore raised a “judgemental management out-of-model adjustment” for the inherent LGD risk on used motor vehicle prices due to new lower-priced entrants to the South African market”.<\/p>\n\n\n\n The warning comes as TransUnion\u2019s Q2 2026 Mobility Insights Report shows that affordability is increasingly influencing vehicle-buying decisions.<\/p>\n\n\n\n New passenger vehicle sales increased 15.8% year-on-year in the second quarter, but the used-to-new vehicle registration ratio climbed from 2.3 in the first quarter to 2.7 in the second.<\/p>\n\n\n\n Chinese brands are at the centre of this shift. Their sales increased 72% year-on-year in Q2 2026, giving them a 22.4% share of passenger and light commercial vehicle sales.<\/p>\n\n\n\n “Affordability has become one of the defining themes of South Africa’s mobility market,” said Ayesha Hatea, director of research and consulting at TransUnion Africa.<\/p>\n\n\n\n “Consumers are increasingly looking for the best overall value proposition rather than simply the lowest price.”<\/p>\n","protected":false},"excerpt":{"rendered":" Data from FirstRand are an early warning sign for South African motorists who care about the resale value of their vehicles.<\/p>\n","protected":false},"author":92,"featured_media":830093,"comment_status":"open","ping_status":"","sticky":true,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"failed","_sma_x_autopost_error":"Instagram publishing failed: Instagram returned HTTP 400: Media ID is not available","_sma_x_post_id":"2101265305011978602","_sma_facebook_post_id":"191437357620492_2210060819814317","_sma_instagram_post_id":"","_sma_x_attempts":1,"footnotes":""},"categories":[11119],"tags":[4088,853,6619],"class_list":["post-875281","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-motoring","tag-firstrand","tag-south-africa","tag-wesbank"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/875281","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=875281"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/875281\/revisions"}],"predecessor-version":[{"id":875350,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/875281\/revisions\/875350"}],"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=875281"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=875281"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=875281"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Metric (R million)<\/th> 2026<\/th> 2025<\/th> Year-on-Year Change<\/th><\/tr> Normalised Earnings<\/strong><\/td> R1,394m<\/strong><\/td> R1,739m<\/td> (20%)<\/td><\/tr> Normalised Profit Before Tax (PBT)<\/strong><\/td> R1,909m<\/strong><\/td> R2,382m<\/td> (20%)<\/td><\/tr> \u2013 Retail VAF PBT<\/em><\/td> R1,016m<\/strong><\/td> R1,557m<\/td> (35%)<\/td><\/tr> \u2013 Corporate & Commercial PBT<\/em><\/td> R893m<\/strong><\/td> R825m<\/td> +8%<\/td><\/tr> Core Lending Advances<\/strong><\/td> R212,686m<\/strong><\/td> R188,256m<\/td> +13%<\/td><\/tr> Net Interest Income (NII)<\/strong><\/td> R6,347m<\/strong><\/td> R6,044m<\/td> +5%<\/td><\/tr> Total Credit Impairment Charge<\/strong><\/td> R2,604m<\/strong><\/td> R2,061m<\/td> +26%<\/td><\/tr> Credit Loss Ratio (CLR)<\/strong><\/td> 1.30%<\/strong><\/td> 1.15%<\/td> +15 bps<\/td><\/tr> Stage 3 NPLs (% of Advances)<\/strong><\/td> 4.83%<\/strong><\/td> 4.54%<\/td> +29 bps<\/td><\/tr> Cost-to-Income Ratio<\/strong><\/td> 52.2%<\/strong><\/td> 51.1%<\/td> +110 bps<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n Value for money is a key driver <\/h2>\n\n\n\n