Chery and GWM are two of the fastest-growing auto brands in South Africa, with their combined sales rising by a staggering 1,749% over the last decade.
In 2014, the two carmakers sold a total of 1,725 units, but this has since ballooned to an impressive 31,897 units as of 2024.
Most of this success has occurred within the last five years, representing a major shift in the market as consumers pivot from legacy brands towards newer options from Asia.
Shaking up the market
South Africa has been struggling with a cost-of-living crisis since the pandemic, with everything from groceries to fuel being significantly more expensive than just a few years ago.
Cars are anything but immune to this trend, as showroom stickers have skyrocketed to the point that even an entry-level hatchback like the Kia Picanto or VW Polo Vivo can now go for up to R325,995 and R356,000, respectively.
This is even more pronounced at the higher end of the price spectrum, as the most affordable BMW and Mercedes-Benz now ask for at least R713,395 and R826,024.
Salaries have not kept pace with this rapid inflation as the average formal sector worker only earns approximately R25,000 per month, forcing households to turn to new brands in search of affordable transport.
This is where Chinese automakers like GWM and Chery enter the picture, as they ostensibly offer well-equipped models for a much lower price than an equivalent European or American marque.
Norman Lamprecht, head of trade and research at Naamsa, recently told Daily Investor that Chinese brands have leveraged the search for value to grow so quickly in South Africa.
He highlighted that two-thirds of all vehicles sold in South Africa in 2023 were below R500,000, which is a bracket that Chinese manufacturers are thriving in at the moment.
“The Chinese importers mainly compete in the SUV segment with affordable models, which is a growing segment globally and in South Africa,” Lamprecht said.
Looking at Chery, its selection of Tiggo Pro crossovers and SUVs has proven to be a massive hit with local buyers, with the budget-focused Tiggo 4 Pro in particular being the 11th best-selling model in October this year.
It’s a similar story for Great Wall Motors and its subsidiary Haval, as the affordable Jolion was the 14th best-seller last month.
It’s thanks to models like these that the two brands have managed to climb their way into the list of the top 10 best-selling brands in a fraction of the time it took for legacy nameplates to do the same.
To put this in perspective, Chery and GWM are outselling more than 18 well-established automakers in South Africa, including Renault, Mazda, Honda, BMW, and Nissan.
Chinese carmakers have also started to branch out into more premium segments, with one example being the recent Omoda C9 – a rival to the likes of the BMW X3, Audi Q5, and Mercedes-Benz GLC.
Even so, brand loyalty is still a factor for several motorists who prefer to stick with tried-and-trusted names like Toyota, especially since most Chinese models haven’t been around for long enough to show if they are reliable with good after-sale support.
China’s biggest challenger
The success of these Chinese brands lies in their competitive pricing, which is made possible by China’s strong focus on exporting from the mainland, leveraging its manufacturing base and cheap labour to eat up market share, according to Lamprecht.
The People’s Republic exported around five million vehicles in 2023, which is expected to increase further as its various marquees continue to undercut their rivals with lower prices.
Western companies are also becoming increasingly reliant on China for their manufacturing, but there is one other country that is still the king when it comes to cheaper production costs.
India is the go-to economy for automakers trying to make budget-friendly models, which can be seen in South Africa as 42% of all passenger vehicles imported here begin life on the sub-continent.
This phenomenon is mostly being driven by Suzuki – South Africa’s third best-selling brand – as 14 of its 15 models are sourced from India.
Other carmakers such as Citroen have also changed their local business strategy, moving away from European-spec imports to much more affordable Indian-built models in an effort to regain market share.
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