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:

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.