South Africa’s automotive sector closed 2025 on a stronger note than anticipated, with the final quarter showing resilience and renewed momentum, according to TransUnion’s Q4 2025 Mobility Insights Report. Improved affordability, lower interest rates and firmer consumer confidence underpinned demand, while Chinese brands accelerated their rise and reshaped the competitive landscape.
Strong finish to 2025
The new passenger vehicle market recorded its best annual performance in more than a decade, with 422 103 units sold – up 20.1% year on year and the highest since 2014. The final quarter alone saw 114 246 registrations, marking the strongest three‑month result since 2014. Sales rose 15.3% year on year in Q4, supported by stabilising macroeconomic conditions, easing inflation, GDP growth of 1.5% in the quarter, and a stronger rand that reduced import costs. Six interest rate cuts since late 2024 also boosted affordability and access to finance.
Demand shifts to new vehicles
One of the standout trends was the swing back to new cars. Registrations surged 30.1% year on year in Q4, while used vehicle registrations edged up just 0.7%. The traditional used‑to‑new ratio fell to 2.9 from around 3.8 in 2024, reflecting narrowing price gaps and improved affordability.
Chinese brands gain ground
The most striking structural change was the rapid rise of Chinese manufacturers. Their combined market share exceeded 17% by year‑end, nearly one in five vehicles sold, and more than quadruple the share seen in early 2021. Growth rates of 86–92% across successive quarters far outpaced the broader market. Competitive pricing, improved quality, high specifications and long warranties – some up to ten years or one million kilometres – have driven success. These brands are also moving beyond entry‑level offerings, targeting mid‑range and premium buyers with well‑equipped models that undercut traditional rivals, forcing established players to respond with stronger incentives.
From imports to local investment
Chinese brands are increasingly shifting from pure import operations to local manufacturing. A major milestone is Chery’s planned acquisition of the former Nissan plant in Rosslyn, expected to conclude by mid‑2026. Government is also in talks with BYD, Suzuki and Proton about potential local production, which could strengthen supply chains, create jobs and reinforce South Africa’s role as a manufacturing hub.
Outlook for 2026
The industry enters 2026 with cautious optimism. Forecasts suggest GDP growth of 1.4–1.6% over the next two years, with easing borrowing costs and improving household finances likely to support demand. Structural challenges remain, but the resilience shown in 2025 and the rise of new players point to a market in transition and expansion.
Staff Writer
Reporting from the front lines of the automotive industry, delivering expert analysis and the technical updates that drive the South African motor sector forward.
