INSIGHT: Chinese car brands claiming a bigger slice in South Africa’s new vehicles market
In a relatively short space of time, Chinese vehicles have made significant inroads into the South African market.
Haval and Chery vehicles have become a common sight on our roads and it seems almost every second week there’s a new Chinese brand vying for a slice of the pie.
But have their sales figures grown sufficiently to keep the chief executives of rival manufacturers up at night?
According to figures released by Lightstone, vehicles from Chinese brands account for 2% of light vehicle sales in South Africa in 2019. Just five years later, that number has grown to 9%, so far in 2024.
While an increasing array of new brands are entering the fray, including recent entrants like GAC and LDV and imminent introductions such as Chery-owned Jetour, the market is still dominated by two main players.
Chery and GWM, including the latter’s Haval brand, currently account for 88% of Chinese branded light vehicle sales in South Africa. Back in 2019 GWM and Haval owned 96% of that space.
Standard Bank says it has seen a consistent year-on-year increase in finance applications for new Chinese cars since 2022. Its data shows the proportion of Chinese car brands having increased from just over 6% in 2022 to 7.4% in the first half of 2024.
This increasing share must be seen in the context of an overall decline in demand for new vehicles in the country.
Year-on-year vehicle sales have been declining since the third quarter of 2023, with the first quarter having seen a 9.6% drop.
“Even though Chinese brands currently represent less than 10% of our retail sales, their upward trajectory is remarkable given the challenging market conditions,” said Derick De Vries, Head of Automotive Retail at Standard Bank.
The 2024 sales figures released by Naamsa, The Automotive Business Council - show that GWM and Chery have become regular fixtures in the list of top 10 selling brands in Mzansi, with the latter having overtaken Nissan for seventh place overall in August. GWM has enjoyed a consistent ninth position for the past four months in a row.
De Vries said this was part of a broader global trend where Chinese vehicles were taking more market share, driven by competitive pricing and growing consumer confidence.
"We are seeing a notable shift in the South African automotive market because of the popularity of Chinese car brands,” De Vries added.
According to Naamsa figures, the Chery Tiggo 4 was South Africa’s top selling compact SUV in 2023 (click here for last year’s top sellers) and it continues to lead the list in 2024, albeit pipped by the Indian-built Toyota Starlet Cross for the first time in August this year, which found 1,181 homes versus the Chery’s 1,072.
Haval’s recently updated Jolion is also playing catch-up, with 953 units sold in August.
Not all of the smaller Chinese brands are reporting their sales figures at present, but among those that recently began, Chery’s separately retailed Omoda and Jaecoo brands have seen relatively strong demand, with the Omoda C5 having attracted 290 customers last month and 224 in July, while Jaecoo J7 sales amounted to 198 and 178 in those two months.
But it’s not just Chinese brands that are leading that country’s industrial charge.
According to Lightstone, 12 non-Chinese brands also import cars from China, making up 10% of the light vehicle market. Examples include the Ford Territory, Kia Pegas and Peugeot Landtrek.
IOL Motoring