How Chinese carmakers are overtaking Japanese, European rivals in South African market

On the streets of South Africa’s major cities, Chinese car brands are becoming an increasingly common sight in a market that has for years been dominated by Japanese and European-made cars.

Generally, when it comes to total car registrations or sales figures, Japanese brands such as Toyota, Suzuki and Nissan dominate in South Africa. European brands, like Germany’s Volkswagen, as well as the South African subsidiary of US carmaker Ford, also have a large share of the market.

But it is in the family SUV category where Chinese carmakers have begun to claw back some of the market share. Companies such as Haval, a subsidiary of Great Wall Motors (GWM), and Chinese state-owned carmaker Chery are now selling more SUVs than some Japanese, European and American brands.

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According to data by the Automotive Business Council or Naamsa, Haval and Chery had some of the bestselling family SUVs and crossovers in the first 11 months of this year.

In fact, analysis done by South African car advertising site Cars.co.za, based on the Naamsa data, showed that while previously the Volkswagen Tiguan had been the country’s top selling SUV, in the first 11 months of 2023 the Haval H6 was ahead with 5,032 units, while Tiguan was in second place with 3,165 units.

Meanwhile in third place was the Chinese Chery Tiggo 8 Pro which sold 2,195 units. It beat South Korea’s Hyundai Tucson which registered 1,767 units in the 11-month period, followed by the Mazda CX-5 with 1,283 units.

Toyota’s RAV4, which last year was the world’s bestselling car, was ranked sixth in South Africa’s most popular SUVs, with 1,021 units registered. Meanwhile SUVs such as the Peugeot 3008 and the Citroen C5, which share the same European parent company Stellantis, did not feature in the top 10, according to Cars.co.za.

The figures mark a turnaround for some Chinese carmakers, particularly Chery which has had a rough history in the South African market. The brand was previously sold in South Africa from around 2008, but in 2018 it was forced to pull out when customers complained about the quality of the cars, lack of spare parts and poor after-sales support.

According to analysts, the carmaker worked hard on improving the quality of its cars as well as establishing a network of reliable dealers before re-entering the market in 2021, starting with its smallest SUV, the Tiggo 4 Pro.

Chery then launched its medium-sized Tiggo 7 Pro, as well as its top-range model, the Tiggo 8 Pro.

The company is also supporting South African dealers and customers with a large parts warehouse, a strong mechanical warranty and service plan, and 24-hour roadside assistance.

Industry analysts have said that price is playing a large part in the market shift towards Chinese cars. Vehicles such as those made by Haval and Chery represent value for money, offering more features at slightly lower prices than similar cars made by some European or Japanese carmakers.

Chinese car brand Haval is outselling the popular Volkswagen Tiguan in South Africa in the SUV market. Photo: Shutterstock alt=Chinese car brand Haval is outselling the popular Volkswagen Tiguan in South Africa in the SUV market. Photo: Shutterstock>

“Indeed, the Chinese carmakers have taken the South African market by storm,” Walt Madeira, principal analyst for Europe, the Middle East and Africa vehicle forecasting at S&P Global Mobility, said.

According to Madeira, in the first 11 months of the year, GWM’s Haval sold 3,000 units of its standard H6 model while the H6 GT model, which was introduced into the South Africa market last year, sold 2,000 units.

Madeira said the successful results of the Chinese brands were due to “value for money”.

Looking at prices for the various SUVs in the South African market, Madeira said the Haval and Chery were sold below 500,000 rand (US$27,000), while most of the other brands, especially European cars, were well above that price (525,000-700,000 rand or US$28,600-38,000).

“The consumer will get a large, robust SUV at a more competitive price versus traditional rivals,” Madeira said. “This also confirms that the South African consumer has become even more price sensitive over recent years.”

He said Chinese carmakers also had a cost advantage when compared with their rivals which allowed for competitive pricing.

The vehicles have even become a powerful diplomatic tool. In August, Haval and Chery provided hundreds of SUVs that were used to transport delegates around Johannesburg during the Brics summit – the annual meeting of the group of emerging economies made up of Brazil, Russia, India, China and South Africa.

The Haval H6 and other models were used to transport delegates and media, while Chery was the official presidential vehicle partner by providing 60 Chery Tiggo 8 Pro Max vehicles that were used to transport VIPs and international delegates during the event.

Just like it did in South Africa, China also recently donated 70 Maxus D90 SUVs manufactured by Chinese carmaker SAIC Motor to be used by delegates attending the Non-Aligned Movement and Group of 77 plus China summits in Uganda in January.

Alex Mohub­etswane Mashilo, a visiting researcher at the University of the Witwatersrand’s Southern Centre for Inequality Studies, said the Chinese brands mostly came with full-house electronic systems, including all-round cameras, navigation, induction charging and more.

This differed to other vehicle producers that treated most of these features – which come as standard in Chinese brands – as extras, with additional costs, Mashilo said.

At the end of the day, as people struggled with a high cost of living, it came down to money, he said.

“An increasing number of families opt for competitive Chinese brands to enjoy the technological features that they would otherwise be required to pay more for if they were to buy other brands,” Mashilo said.

“A Chinese brand introduced a 10-year or 1 million kilometre engine warranty, which no other brand offers. These are the things that the increasing number of people who buy Chinese brands consider.”

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2023 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2023. South China Morning Post Publishers Ltd. All rights reserved.


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