The used car market is experiencing a drop in sales as consumers shift back towards new models.
This reversal in motorist buying habits is largely thanks to the influx of affordable imports from countries like India and China, which are able to cost-effectively compete with pre-owned cars.
This is according to TransUnion’s latest Q1 2025 Mobility Insights Report, which suggested more new vehicles are being sold as buyers would rather purchase a new Chinese car at the same price as a second-hand premium unit.
The trend is likely to pose a growing threat to South Africa’s used car market and its biggest stakeholders, such as WeBuyCars and Wheelee.
New-car sales have seen a major comeback this year, averaging more than 34,000 purchases per month in the first quarter of 2025.
The report noted that passenger car sales grew by 20.6% year on year in Q1 2025, up from 14.1% in Q4 2024, to reach 102,268 units, the highest quarterly figure in nearly a decade.
The general uptick in consumer spending is attributed to an improvement in real wages, easing consumer price inflation, recent interest rate cuts, and payouts from the two-pot retirement system, according to BusinessTech.
TransUnion also noted that one of the most important drivers in the shift from used to new cars have been the influx of Chinese brands that appeal directly to budget-conscious motorists.
“South Africa’s car market is shifting from luxury brands to more affordable options, driven by rising financial pressure on households,” the report said.
“Consumers increasingly perceive these [Chinese] brands as offering strong value for money.”
While local buyers have often expressed their concern over the longevity of these vehicles, this mindset is starting to shift as Chinese brands become more embedded in our auto sphere.
Carmakers like Chery and GWM now have a significant presence in South Africa, which means that concerns about spare parts availability and aftersales service support are being addressed as these companies continue to expand their dealer networks.
TransUnion highlighted that Chinese brands increased their collective market share from 9% to 12% between 2021 and 2025.
“This growth appears to be coming at the direct expense of traditional original equipment manufacturers (OEMs), whose collective share has dropped from 64% to 53% over the same period,” it said.
What this means for the used car market
Chinese brands are not the only ones benefiting from the reversal in consumer spending, as Suzuki and Mahindra have also seen enormous growth over the past few years.
Suzuki experienced a 19.8% year-on-year increase in sales, while Mahindra saw a staggering 71.8% jump over the same period.
In comparison, the pre-owned market only grew by 0.9% in Q1 2025, compared to 4.7% in Q4 2024.
“This growing demand for affordable new models is starting to squeeze the used car market,” said TransUnion.
“South Africa’s import dependency, especially on more affordable vehicles from India and China, is reshaping the competitive landscape and putting pressure on local manufacturers.”
For example, it is possible to buy a brand-new Chery Tiggo 4 Pro SUV for as little as R269,900.
According to AutoTrader’s monthly sales report, the average selling price for a used VW Polo is R268,688.
These units tend to be five years old with a mileage of around 74,032km.
In other words, you can buy a new Chinese SUV in South Africa for the same price as a five-year-old Polo.
Chery also offers a 5-year/150,000km general warranty, a 3-year/30,000km service plan, and a 10-year/1-million kilometre powertrain warranty on the Tiggo 4 Pro, providing consumers with far greater peace of mind than they would have with a used model, especially if it doesn’t have a service record.
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