New car companies have been popping up left and right over the last five years but most of them have a long way to go before they will top the sales charts.
The single biggest hurdle to becoming a successful carmaker in South Africa is brand loyalty, as a few legacy manufacturers hold a lion’s share of the market, and it’s an uphill battle to convince motorists to part ways with a proven badge.
Making the switch
Chinese automaker Jetour recently commented about its entry to the local market, explaining the various challenges it faces as an unknown badge in South Africa.
“Loyalty to traditional automakers is a significant challenge for new brands,” said Jetour South Africa’s vice president Nic Campbell.
“Building trust in such an environment requires a clear, consistent message and a unique value proposition, especially when competing against well-established brands with strong followings,”
Jetour entered the market in late 2024, making it one of the newest Chinese carmakers in the country alongside other names like GAC Motors and MG.
The latest wave of Chinese manufacturers began in 2021 when Chery relaunched in South Africa, which has since been followed up with the release of names like Omoda, Jaecoo, and BYD.
This influx of brands from the People’s Republic was initially met with skepticism from local buyers, owing to the reputation that certain Chinese manufacturers established when they first tried to set up shop here in the 2000s.
However, the newer models introduced in the last five years have seen a massive improvement in quality to the point that they are now competing with well-established legacy nameplates.
“Chinese cars have long been criticised, often unfairly so,” said Jaecoo.
“The latest models from China are a far cry from the admittedly inferior products that reached South African shores more than a decade ago.”
Attitudes towards Chinese cars are starting to change as a result, and a few brands such as Chery and GWM are now consistently among the top 10 best-selling automakers in the country.
However, South Africa’s top five manufacturers – Toyota, Suzuki, VW, Hyundai, and Ford – account for 63.4% of the market share, meaning that these new brands still have a long way to go to before they can break into this exclusive club.
Toyota alone accounts for roughly a quarter of all the new light commercial and passenger vehicle sales in South Africa, and much of this success can be attributed to how well established the carmaker is.
Successful companies with a long presence in a country means there is an expansive dealership network, and spare parts are rarely hard to find.
Jetour said it found that concerns about parts availability and after-sales service were key factors causing hesitation among potential customers when considering a new brand.
To address this problem, the company set up a parts warehouse in Johannesburg with R75 million of parts on hand, with another R25 million on order.
Several Chinese carmakers also have industry-leading warranties that go well beyond the standard 5-year plans offered by most companies, such as GAC’s lifetime engine warranty.
It illustrates the lengths that new automakers are going to in order to convince customers to take a chance on something that isn’t one of the big five in South Africa.
The one noticeable advantage that Chinese carmakers have over their legacy rivals is price, as their models are often significantly cheaper than their competitors.
Even when the prices are similar, the spec sheets of the cars are not, as the newer models tend to offer a lot more equipment as standard instead of relegating it to an optional extras list.
Consumers have caught on to this fact and are starting to check out newer brands in search of a deal that offers better value for money.
Companies like VW and Toyota have acknowledged the threat that these newcomers pose, and are currently exploring options to reduce their own prices in an effort to stay competitice.
At the launch of the facelifted Polo Vivo last year, a VW representative commented on the value proposition that Chinese makes have compared to their own lineup, explaining that brand loyalty only goes so far when the price gap becomes wide enough.
“Our customers are loyal, but they are not that loyal,” they said.
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