Nearly one in five new vehicles sold in South Africa now comes from a Chinese brand

Nearly one in five new passenger and light commercial vehicles sold in South Africa now comes from a Chinese manufacturer, highlighting the remarkable speed at which Chinese brands are gaining ground on established rivals.

Chinese vehicle sales jumped 75% year on year in the first quarter of 2026, according to TransUnion, helping lift their market share beyond 19%.

TransUnion’s Q1 2026 Mobility Insights Report shows Chinese manufacturers are outperforming both traditional vehicle makers, whose sales grew by just 2%, and the broader passenger and light commercial vehicle market, which expanded by 12.7% during the quarter.

French carmaker Renault is planning to cut 800 engineering jobs in France by the end of 2027 in a bid to make its organisation leaner to better compete with Chinese rivals. Chinese makers have more than tripled their market share in Europe over the past two years, with technologically advanced products and very competitive prices, Philippe Brunet, Renault’s chief technology officer, told reporters in a conference call. “All other manufacturers are suffering, the Koreans, the Japanese in Europe, or other Europeans, including us,” he added. “We must be able to compete against this.” With a workforce of 5,500, France accounts for half of Renault’s global engineering staff. In mid-April, Renault, one of the smallest legacy car makers, said it planned to reduce its total engineering workforce by 15% to 20% by the end of 2027, and the 800 job cuts would be part of that move. The company expects to get its transformation plan approved by unions in July and implemented from September. It would also include the retraining of 2,500 workers and between 150 and 200 new hires to work mainly on electrifying vehicles, software and AI. Brunet also announced an overhaul of the organisation and working methods to simplify R&D operations and become more agile in the race against Chinese competitors, who have set a new benchmark by developing models in just two years, down from the four to five years traditionally in the industry. “My issue is speed,” he said. He intends to reduce the complexity and the number of steps in a vehicle project and decrease the time spent in meetings by 20%. Reuters

The surge is no longer being driven solely by aggressive pricing. Consumers are increasingly being drawn to technology, safety features, fuel efficiency, warranty packages and overall ownership value.

Among the biggest beneficiaries is Chery Group, whose combined portfolio of Chery, Jetour, Omoda and Jaecoo brands sold 16,094 vehicles in the first quarter, placing the group among South Africa’s top three automotive players.

“The market is moving into a more selective phase,” said Ayesha Hatea, director of research and consulting at TransUnion South Africa.

“Consumers are still buying vehicles, but affordability is no longer only about the purchase price. Fuel costs, financing costs, insurance, servicing and total cost of ownership are becoming central to the decision.”

Hatea said Chinese manufacturers had evolved beyond being price disruptors and were becoming structural industry players that are influencing dealer networks, financing ecosystems, ownership perceptions and the wider discussion around localisation and industrial competitiveness.

The report also points to continued strength in the new vehicle market. New vehicle registrations increased 11.6% year on year in the first quarter, marking a sixth consecutive quarter of double-digit growth, while used vehicle registrations rose by a more modest 2.6%.

As a result, the ratio of used-to-new registrations fell to 2.3, the lowest level recorded during the reporting period. New vehicles accounted for 31% of registrations, up from 23% in the final quarter of 2025.

Favourable pricing trends have helped support demand. New vehicle inflation slowed to just 0.8%, while used vehicle prices remained in deflationary territory at -1.3%.

Consumer confidence also appears to be improving. TransUnion’s Consumer Pulse Survey found that the proportion of consumers planning to buy a vehicle within the next few months rose from 19% in the fourth quarter of 2025 to 22% in the first quarter of 2026. Purchase intentions were strongest among younger buyers, with 26% of Generation Z and 24% of Millennials indicating plans to enter the market.

The report notes that residual values are becoming increasingly important as consumers opt for longer finance terms and balloon-payment structures to keep monthly instalments affordable. Vehicles that retain their value well are gaining a competitive advantage, while weaker resale performance could expose owners to refinancing pressure or negative equity when trading in.

Powertrain preferences are also evolving. Conventional internal combustion engine vehicles remain the most popular choice, preferred by 49% of consumers, but hybrid vehicles are gaining traction. Interest in hybrids rose to 39% from 30% in the previous quarter, making them the leading electrified option. Interest in both battery-electric and plug-in hybrid vehicles also increased to 26%.

“Hybrids are emerging as a practical transition pathway for South African consumers,” said Hatea.

“They offer fuel savings and lower running costs without full dependence on charging infrastructure, which makes them relevant in a market where affordability and operating certainty remain critical.”

Business Day