The majority of the nation’s favourite vehicles are built on local soil, while the rest are either imported from India or China.
While factors such as the brand, model, and body style play a big role in the types of cars people buy, the country where they are assembled does, too, even if it’s rarely considered when purchasing decisions are made.
This is because the location affects a major aspect of the car in question, and that is its price.
Between 18% and 42% of the price of a new car nowadays is attributed to import taxes, according to Naamsa The Automotive Business Council.
There are several taxes imposed on a new vehicle when it is transported across our borders, including:
- Value Added Tax (VAT) – 15%
- Ad Valorem Tax – Calculated on a per-vehicle basis, capped at 30%
- CO2 emissions tax – 2.5%-6%
- Import duties – 25% (18% if imported from EU)
As such, a car that is built on domestic soil is not affected by a large portion of these surcharges, automatically rendering it more affordable than a similar model that was shipped in from another country.
Take, for example, the locally-made Ford Ranger. The cheapest Ranger Double Cab is priced at R522,600 in South Africa.
In the United Kingdom, a top export destination for Ford South Africa, the cheapest Ranger Double Cab runs for £36,690 (incl. VAT) which equates to roughly R852,000 at current exchange rates.
Admittedly this isn’t a like-for-like comparison as the UK’s tax legislation and the specifications of its bakkies are different than ours, however, it still illustrates the fact that there is a major benefit to producing locally.
If an automaker does not have any domestic production facilities, it will prefer to import a vehicle from another country with similarly low labour and operational costs, like India or China.
This is because the cheaper the company can build the car, the less import taxes it will attract, and the more affordable it can be priced.
This is one of the reasons the Mazda BT-50 was discontinued for the South African market earlier this year.
The latest iteration of the BT-50 was sourced from Thailand which, due to import taxes, forced Mazda to set its pricing at an uncompetitive level relative to domestically produced models like the Toyota Hilux, Ford Ranger, and Isuzu D-Max – coincidentally (or perhaps not) the country’s three best-selling bakkies.
The BT-50’s sales volumes suffered as a result; it only attracted 69 customers over the entirety of 2023, versus 37,382 for the Hilux, 24,618 for the Ranger, and 18,962 for the D-Max.
The Mazda-badged double cab was therefore put to pasture a mere three years after the latest generation was introduced in 2021.
“The South African LCV, and in particular the double-cab market, is extremely well developed and competitive with locally manufactured brands and nameplates dominating sales,” said Craig Roberts, MD of Mazda South Africa, when he announced the BT-50’s discontinuation.
“This factor, as well as an extremely challenging landscape for imported vehicles, competing directly with locally manufactured products, has led Mazda SA to make this difficult decision.”
It’s an element few consumers take into account, but the country in which their car was produced does impact the likelihood that they will purchase it.
Countries of origin
The list below details the country’s top 10 best-selling cars from July, and where they are assembled.
Click on the underlined prices for more information.
1. Toyota Hilux
- Built in – Durban, South Africa
- Starting price – R361,700
2. VW Polo Vivo
- Built in – Kariega, South Africa
- Starting price – R266,600
3. Ford Ranger
- Built in – Silverton, South Africa
- Starting price – R514,800
4. Isuzu D-Max
- Built in – Gqeberha, South Africa
- Starting price – R447,900
5. Toyota Corolla Cross
- Built in – Durban, South Africa
- Starting price – R408,400
6. Hyundai Grand i10
- Built in – Chennai, India
- Starting price – R224,900
7. Toyota Starlet
- Built in – Hansalpur Becharaji, India
- Starting price – R252,100
8. VW Polo
- Built in – Kariega, South Africa
- Starting price – R357,500
9. Chery Tiggo 4 Pro
- Built in – Wuhu, China
- Starting price – R279,900
10. Nissan Magnite
- Built in – Chennai, India
- Starting price – R240,000
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