Chinese cars are more affordable in South Africa – But they still aren’t cheap
Chinese cars are considerably cheaper than their legacy rivals in South Africa; however, local motorists still pay much more than Chinese buyers.
While one might assume that this is simply another case of high import taxes penalising South African consumers, this doesn’t tell the whole story with Chinese cars.
In South Africa and other international markets, Chinese manufacturers have a much higher profit margin, which is reflected in the retail price of their cars.
Our sister publication MyBroadband recently published a breakdown of the price discrepancy between Chinese cars sold in their home market compared to what we pay for them here.
The Geely E2, for example, is one of the cheapest electric vehicles (EVs) you can buy. In China, its two variants – the Aspire and Apex – cost 71,800 and 94,800 yuan.
At the time of writing, that works out to R178,397 and R234,774, respectively, at the current exchange rate. In South Africa, the same cars cost R339,900 and R389,900.
While it is easy to blame this massive price gap on import taxes, there remains a substantial difference between the landing cost and the final retail price after duties are factored in.
All cars imported into South Africa, with the exception of those shipped from the European Union and the United Kingdom, are subject to a 25% customs duty, regardless of their powertrain.
They are also subject to value added tax (VAT), which is calculated at 15% on 110% of the declared value of the vehicle.
Lastly, all cars in South Africa are hit with an ad valorem duty, which is calculated on a sliding scale.
Shipping and insurance fees could account for another R30,000, but even with all of these costs factored in, there is still a noticeable discrepancy in the South African pricing.
The following table shows the difference between the Chinese and South African prices of the Geely E2 after costs, including an estimated shipping fee, insurance costs, and a 4% dealer margin:
| Cost component | Geely E2 Aspire | Geely E2 Apex |
|---|---|---|
| Chinese retail price minus 15% VAT | R155,126 | R204,097 |
| Customs duty (25%) | R38,782 | R51,024 |
| VAT | R31,995 | R42,094 |
| Ad valorem rate | 3.0% | 4.1% |
| Ad valorem tax | R4,612 | R8,467 |
| Total taxes | R75,389 | R101,586 |
| Shipping and insurance estimate | R30,000 | R30,000 |
| Total landing cost in South Africa after taxes | R260,515 | R335,682 |
| Retail price | R339,900 | R389,900 |
| Difference | R79,385 | R54,218 |
| Dealer profit estimate (4%) | R10,421 | R15,596 |
| Carmaker profit estimate | R68,964 | R38,622 |
| Carmaker profit margin estimate | 26.5% | 11.5% |
Chinese brands have higher profit margins in international markets
To put this in perspective, legacy manufacturers typically add a profit margin of around 5% to 8%. In contrast, Chinese brands generally use a higher margin outside of their home market.
In China, carmakers face fierce competition, and customers have higher expectations for features, forcing companies to engage in price wars and continually push to innovate.
These same conditions do not exist in other markets, making them the ideal target for further expansion.
Geely’s chief financial officer previously said that export gross margins were about 10 percentage points above domestic margins.
BYD, meanwhile, recorded a gross margin of 21.71% in foreign markets compared to 15.67% in China in 2026.
This gap is growing, too, as BYD’s overseas and domestic margins were 19.46% vs 16.66% in 2025, respectively.
Even with these higher profit margins, Chinese cars are still substantially cheaper than their legacy rivals, which has helped them to carve out a large chunk of the market in the span of a few years.
They are so much more affordable, in fact, that they have had a detrimental impact on South Africa’s second-hand market, as consumers are able to buy new Chinese cars for the price of a used VW Polo or Toyota Corolla Cross.
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Conversation
3 commentsI want to see how the influx of Chinese vehicles are going to last in SA. Various friends have Chery and Haval vehicles that is about 6 months old. They can even get small parts for it as the Chinese have updated the electronics. Some friends can’t find technicians to work on it. 2 BAIC dealership have closed near me and now the owners got to drive in excess of 60km as the other Chinese do not want to touch it and it would invalidate the warranty. Even the ORA 3 you can’t resell as it has dropped it its value so far.
And then this article from Wendy Knowler
South Africa has been swamped with vehicle safety recalls, with more than 50 instances recorded just this year.
These usually affect legacy brands – established big names like Volkswagen, Toyota and Ford, for instance.
But, considering the influx of Chinese models which now make up more than 19% of our new vehicle sales, why are these largely absent from the list?
As Wendy Knowler points out, just one Chinese-owned brand appears in the recall notices issued by the National Consumer Commission (NCC) in 2026.
But, according to NCC records, the problem with the driver’s seat of the MG3 – produced by SAIC Motor in China – emerged during Euro NCAP testing.
As consumers, the way we are alerted to recalls is through the NCC, which has strict guidelines requiring carmakers to notify the regulator in writing.
A common misconception is that a recall indicates something wrong with a brand, when in fact it shows our checks and balances are working for the consumer.
“It doesn’t necessarily mean that the legacy brands are more problematic than the Chinese brands. Recalls are normal in all markets; they’re not a scandalous thing. It’s actually the sign of consumer protection working as it should.”
Digging a little deeper to find the reasons for the absence of Chinese carmakers in local notices, Knowler found that some brands aren’t reporting their recalls to the NCC as they do in other markets.
She cites the example of Chery, one of the biggest Chinese players in the South African market.