The rise of Chinese cars in South Africa

Chinese car companies have shown incredible sales growth in South Africa over the past decade, going from relative obscurity to some of the most popular brands on the country’s roads. 

This is largely due to South African consumers coming under financial pressure with high inflation and elevated interest rates making repayments on car loans more expensive. 

FinMark Trust’s annual FinScop Consumer report for 2023 revealed that nearly half of South Africans cannot afford basic necessities due to the rising cost of living. 

It also showed that spending on food takes up a third of the total income of the average South African, leaving little to spend on luxuries. 

The survey said the rising cost of living profoundly impacts people’s wallets, affecting their financial stability and overall well-being in several ways. 

Since a large portion of their income is allocated to cover necessities, people have less money for savings, investments and leisure activities. 

This also severely impacts their ability to buy a car or upgrade their existing model, with many turning to cheaper alternatives Chinese brands offer. 

This is a product of a decade of incredible sales growth, with Haval-owner GWM’s sales, for example, growing from 1,004 cars in 2014 to 14,284 in 2023. 

Chery has seen a similar growth trajectory, selling over 16,000 cars in 2023 compared to 1,297 in 2014. 

The rapid growth of the two largest Chinese car companies can be seen in the graph below. 

As a result, it is estimated that around 20% of South Africa’s new car market will be taken up by Chinese brands by the end of this year. 

Some of these brands have been around for over a decade in South Africa, but the majority are new to the market and rapidly expanding their local offering. 

In 2023, Omoda, BYD (Build Your Dreams), and SAIC (Shanghai Automotive Industrial Corporation) were introduced. The latter operates through the local distributor Maxus Electric Vehicles.

These companies’ entrances add to the existing Chinese offerings from BAIC, Chery, JAC, and GWM, whose major subsidiary is Haval. 

Recently, Chinese brands have begun to move into the higher-end luxury market, with Chery launching Jaecoo in South Africa in 2024. 

This is the second luxury sub-brand the company has launched following Omoda last year. 

While Omoda is focused on high-tech crossovers like the C5 and all-electric E5, Jaecoo is focused on the premium SUV segment.

Foton is re-entering South Africa in June with its own double cab, the Tunland G7, as well as several light and medium commercial vehicles aimed at the business sector.

Another newcomer is GAC Motors, which is introducing three new SUVs. Two of them run on petrol, while the third is a battery-electric (BEV) vehicle.

On that note, BYD will be launching its second car in South Africa in the near future, called the Dolphin, which is an electric hatchback that is poised to become the country’s cheapest BEV.

GWM will add the P500 bakkie and the Tank 500 SUV to its line-up, while Haval is introducing the Jolion Pro and H7.