Volkswagen and Nissan left by the wayside in South Africa

Increasing imports of low-cost vehicles from China and India are beginning to displace long-standing players in South Africa’s local manufacturing sector.

This was revealed in a recently released report by the Bureau of Economic Research (BER), which detailed how Asian-imported vehicles are shifting the country’s automotive market.

South Africa is 21st in global vehicle production at 0.64%, compared to 4th-place India with 6.4% and China in first place, accounting for 33.7% of all vehicle production worldwide.

Approximately 69% of all new vehicle sales in South Africa in 2025 were imported, with India accounting for 56.2% of those imports.

South Africa remains the top export destination for Indian vehicles, with data from naamsa indicating that 9 of the top 15 best selling cars in South Africa in 2025 were imported from India.

Meanwhile, China increased its share in South Africa’s imported vehicle market to 23.3% in 2025, continuing its rapid growth over the past few years from less than 10% in 2021.

The rising prevalence of cheap imports from these countries has shifted market share dynamics in South Africa’s motoring sector, with seasoned local manufacturers beginning to lose ground.

Volkswagen, which began manufacturing operations in the country 80 years ago, lost its place as South Africa’s 2nd biggest automotive brand to Suzuki, which is imported from India.

Nissan, which has existed in South Africa since 1966, was ousted from the top 10 completely over the last two years, losing its 6th place spot to the Chinese brand GWM.

Chery, another Chinese brand which is imported into the country, also entered the top 10 in 2024 at the 8th spot, where it remained in 2025.

The report showed that only 4 of the country’s top 10 brands in 2025 were locally manufactured, with Toyota retaining its top spot that it has held for over two decades.

Nissan recently announced it would cease manufacturing operations in South Africa and act solely as an importer, selling its last remaining manufacturing plant in Rosslyn to Chery.

Local production struggles to keep up

The findings in the BER’s report expose significant structural weaknesses that have plagued South Africa’s local automotive manufacturing sector for years.

The Department of Trade, Industry and Competition promulgated South Africa’s Automotive Master Plan in 2018, with a goal of producing 1% of all vehicles globally by 2035.

As of 2025, the country produced approximately 610,405 vehicles, sitting around 56% below its long-term manufacturing target of 1.4 million vehicles annually.

Growth in local vehicle production stagnated over the last decade, impeded by issues of logistics disruptions and energy insecurity, which drove up operating costs for vehicle manufacturers.

Production output declined sharply between 2019 and 2021 due to frequent loadshedding as well as the Covid-19 pandemic. Since then, recovery has been slight.

Alongside this, stunted economic growth and an escalating cost-of-living crisis have pushed South Africans towards the more affordable import options from China and India.

The country’s local vehicle production policy, meanwhile, has been geared more towards meeting globally competitive export standards.

“This strategy has been largely successful in establishing the sector as one of South Africa’s leading export industries,” BER said.

“However, it has also shaped an industry more closely aligned with global demand and export performance than with the affordability and competitiveness requirements of the domestic vehicle market.”

Despite this, South Africa’s total automotive trade deficit reached R66.5 billion in 2025, showing the country still imported far more vehicles than it exported.

The country’s trade deficit with Asia alone has grown by 162% over the last decade and totalled as much as R143.5 billion in 2025, as over 80% of all cars exported from South Africa go to the United Kingdom and Europe.

In an interview with 702, BER junior economist Rose Murunzi said understanding the sector’s constraints and developing strong policy to address these is vital to protect local manufacturers.

“We need to get the house correct first,” Murunzi said. “It’s easy to worry about competition, but if we don’t have the correct environment to compete, it makes it harder.”

“We need to say, ‘What is it in South Africa that we need to fix? How fast are we fixing it? And are we ready to adapt when the time comes?’”