South Africa’s automotive sector is under pressure as Chinese vehicle imports surge, threatening local production and industry stability, according to Toyota South Africa Motors (TSAM) CEO Andrew Kirby.
Speaking at the State of the Motor Industry event on January 23, Kirby warned that the influx of affordable Chinese vehicles is reshaping the market, putting local manufacturers at a disadvantage. While competition is natural, he said the current conditions favor imports over local production, raising concerns about de-industrialisation.
Chinese brands have rapidly expanded their presence in South Africa, driven by economic factors that prioritize affordability over brand loyalty. The market share of Chinese and Indian cars has risen from 18% in 2018 to 37% in 2023. Chinese brands alone grew from 2% market share in 2019 to 9% in 2024. In contrast, locally produced vehicles now make up just 43% of total sales, down from 46% in 2018.
Kirby attributed the decline in local manufacturing to shifts in vehicle sourcing. South Africa’s factories previously assembled cars using locally sourced parts, a process called Completely Knocked Down (CKD) production, which supports jobs and economic growth. Since 2018, CKD production has dropped by more than 11%, while fully assembled vehicle imports, particularly from Asia, have increased.
South Africa’s Automotive Production Development Programme (APDP), specifically Chapter 98, offers trade rebates and semi-knocked-down options that make imports more attractive than local assembly. If this trend continues, Kirby warned, the industry could become entirely dependent on foreign-built vehicles.
Government-backed subsidies in China further allow competitive pricing, with 13 Chinese manufacturers now offering 34 different models across various segments, from hatchbacks and SUVs to sedans and bakkies. Brands like Haval, Chery, Great Wall Motors (GWM), BAIC, Foton, and JAC Motors have gained traction, with Haval and Chery each selling over 1,500 units per month.
Economic conditions in South Africa have made these affordable alternatives appealing. The average price of a new vehicle has dropped from R501,901 in 2023 to R490,478 in 2024, while used car sales surged by 9.4% year-on-year to over 54,000 units. Banks have also reported a decline in successful financing applications for new vehicles, reflecting financial strain on consumers.
Traditional automakers like Toyota and Volkswagen still maintain a competitive edge through brand trust, after-sales service, and customer support. However, Chinese brands are steadily improving their offerings and gaining market share.
According to the National Association of Automobile Manufacturers of South Africa (Naamsa), Chinese car imports rose from 11,000 in 2019 to 39,000 in 2023, now accounting for 21% of all light-vehicle sales in the country. This shift coincides with a broader decline in South Africa’s automotive industry. Vehicle sales in 2024 fell by 3% to 515,712 units, the lowest since the COVID-19 pandemic. Exports also dropped by 22.8% to 308,830 units due to weaker demand in the European Union, stricter emissions regulations, and increased competition from Chinese electric vehicles.
