Affordable new cars are putting pressure on South Africa’s used market

Car buyers in South Africa are spoiled for choice when it comes to either the new or pre-owned market, with value-for-money offerings in both segments competing for buyers’ attention.

Despite the success of the used car industry, it may soon be under pressure from the new car sales that historically feed into the pre-owned sector.

This is thanks to the sharp local rise of affordable offerings from emerging brands based in markets like China and India.

“South Africa’s new car market is showing strong growth, supported by improving consumer confidence, better financing conditions, and steady economic recovery,” noted Jaco van Staden, Head of Sales at Lightstone Auto.

The Automotive Business Council’s (Naamsa’s) numbers show that, in January and February 2026, sales hit nearly 104,000 units, marking the first time in a decade that sales broke through the 100,000 barrier.

“The headline numbers, though, mask the ebb and flow of a market responding to pressure and opportunity,” noted Van Staden

“Much of the impetus for reshaping overall demand dynamics is coming from the east as Chinese automotive brands have rapidly gained market share by offering modern, well-equipped vehicles at highly competitive prices.”

He added that these are joined by affordable vehicles made in India, which are attracting budget-conscious buyers and first-time car owners.

Lightstone’s data highlights that affordable new vehicles are shifting market demand, and pressuring used prices

Used vehicles have lost retained value, while the weighted average of new car prices stabilised at the same time that affordable new cars from markets like China and India gained market share.

New car prices, particularly from emerging brands, saw their prices stabilise and even come down at the same time that used vehicles began retaining less of their value, which has continued since the second half of 2023.

The used market is still strong in South Africa

Despite this pressure from the new car market, South Africa’s pre-owned sector has remained strong, selling over R160 billion worth of stock in 2025.

While traditional car manufacturers are managing their prices in a bid to navigate South Africa’s stretched consumer market, used vehicles are becoming more popular among older buyers.

“Car buyers from older generations shifted towards used vehicles between 2019-2025, joining younger generations who were already used-dominant,” noted Lightstone.

It said that the data shows a clear generational shift in vehicle purchasing behaviour as affordability continues to be the defining force shaping generational buying behaviour.

This sentiment is shared by AutoTrader CEO George Mienie, who says the modern South African car buyer has evolved, adding that the local market is no longer brand-driven, but value-driven instead.

Lightstone noted that the most striking feature in its data is the growth of used car sales, particularly after 2021, across all generations.

53.8% of Baby Boomers (born 1946 to 1964) swung toward used vehicles in 2021, up from 45.2% in 2019, before returning to a more balanced split by 2023 and 2025.

Generation X (born 1965 to 1980) showed a stronger shift, accounting for around 60% of used purchases from 2021, while younger buyers displayed the strongest preference for pre-owned vehicles.

70% of Millennials (born 1981 to 1996) showed a preference for used cars, while a staggering 77% of Gen Z (born 1997 to 2012) buyers have chosen used cars since 2021.

“Although there was a slight recovery in new vehicle purchases by 2025 among younger buyers, used vehicles remained dominant for Millennials and Gen Z,” noted Lightstone.

While the used market remains strong, it is facing increasing pressure from affordable new cars, and these could shift local buyer behaviour at any time.

“The vehicle market remains in almost permanent transition, driven by ever-changing consumer demands,” added Lightstone.

“The trend toward new Chinese and Indian-built vehicles gaining a bigger share of sales relative to used cars will likely be a gradual shift over several years rather than a sudden flip.”