The car company shaking up South Africa
South African motorists have significantly changed their purchasing habits in recent years as they come under financial pressure from elevated interest rates and a rising cost of living.
Cheaper alternatives to traditional German luxury vehicles, from BMW, Mercedes, and Audi, have risen in popularity.
Suzuki and Chinese brands, such as Haval and Chery, have benefited most from this, with sales soaring.
Suzuki’s sales, in particular, have skyrocketed, and it has become a regular fixture among the top five most-sold car brands in South Africa on a monthly basis.
In 2023, the Japanese brand sold the third most cars in South Africa at 47,201 vehicles, behind only the industry stalwarts of Toyota and VW. It tripled the volume it sold in three years.
The growth of cheaper Chinese cars has been equally impressive, with Haval selling 14,265 cars in 2023 – nearly double its 2020 volume.
Chery has grown its sales extremely strongly since reentering the South African market in 2022, selling 16,110 cars in 2023.
One thing all three of these brands have in common is that Combined Motor Holdings (CMH) handles their dealerships, distribution, marketing, and repairs.
This relatively unknown company, listed on the JSE, has seen its market cap almost double in the past five years, with its headline earnings per share growing more than 100% during the period.
The company’s main operating division retails and distributes 28 brands across Gauteng, the Western Cape, and KwaZulu Natal. Suzuki, Haval, and Chery are the chief among these.
In the past five years, the company’s profit has more than doubled to R408 million as these brands have risen in popularity.
Notably absent from its list of brands are any German luxury brands, with CMH focusing on affordable Asian-manufactured vehicles.
It has some exposure to the luxury market through its Jaguar-Land Rover operations in Pretoria and Umhlanga, but this is a relatively small part of its business.
In the company’s integrated report for the 2024 financial year, CEO Jebb McIntosh highlighted the shift towards cheaper vehicles from Asia.
He noted that more than 50% of vehicles sold in South Africa are already sourced from India or China as consumers increasingly turn to affordable options.
Furthermore, as consumers turn to these brands, CMH’s parts business has seen its profits rise 20% as it is the largest importer of parts for Chinese vehicles through its Mandarin Parts Distributors.

On the other side of this trend is Motus, a competitor to CMH that was spun out of Imperial years ago.
Rather than focus on affordable Asian brands, Motus operates dealerships for brands such as BMW, Audi, Jeep, Mercedes-Benz, and Jaguar-Land Rover.
It is also the exclusive importer of Kia, Hyundai, Renault, and Mitsubishi in South Africa and distributes these vehicles and parts across Africa.
In its latest set of interim results, Motus noted the growing trend of South African motorists buying down, with many delaying upgrades, not purchasing a new car, or searching for cheaper alternatives.
Motus said there has been a distinct rise in competition from new vehicle brands that have come into the market at very competitive prices.
This, coupled with higher-than-normal vehicle and parts price inflation, eroded the company’s profit margins.
In South Africa, Motus’ import and retail businesses were negatively impacted by pressure on consumer affordability, a buying-down trend, and fierce competition.
The stabilisation of the vehicle supply chain significantly improved inventory availability, which impacted the margins on vehicles sold.
The abovementioned discounts provided, in response to increasing competition from new brands, are having a negative impact on the margins, the company said.
The company’s aftermarket parts business was also affected by a buying-down trend and increased costs. Delays at South Africa’s ports increased lead times for products, limiting availability.

The trend of South African motorists buying down does not appear to be coming to an end anytime soon, as some of the largest financiers of new cars have flagged increased demand for Chinese vehicles.
Standard Bank said despite the pressure on overall sales of vehicles, the number of Chinese cars financed by its vehicle finance division has consistently increased since 2021.
Its latest sales data shows that the proportion of Chinese car brands increased from just over 6% in 2022 to 7.4% in the first half of 2024.
Head of Automotive Retail at Standard Bank Vehicle and Asset Finance, Derick De Vries, said this growth is especially notable when considering the broader decline in new vehicle sales in the country.
“Even though Chinese brands currently represent less than 10% of our retail sales, their upward trajectory is remarkable given the challenging market conditions,” he said.
In the second quarter of 2024, new vehicle sales dropped by 9.6% compared to the corresponding quarter in 2023.
During this same period, Standard Bank Vehicle Finance financed more new Chinese car brands, with GWM Haval being the most popular Chinese brand financed since 2022, followed by Chery and BAIC.
These cars are particularly popular in Gauteng, where Standard Bank concluded 54% of Chinese car brand deals. KwaZulu Natal and Western Cape also contribute to their growing presence, with 18% and 10% of deals, respectively.
Furthermore, the used car market for Chinese brands is expanding. The proportion of used Chinese car brands financed by the bank increased from 20% in 2022 to 36% in July 2024.
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