Increased foreign competitors force local automakers to hit the brakes
When you drive on South African roads in 2025, it’s impossible not to notice the shifts that have taken place in the motoring industry. Ten years ago, the vehicles passing you were likely to be mainly a mix of Toyotas, Hondas, Hyundais and Kias. Nowadays, you’re just as likely to pull up at a traffic light next to a Haval, Tiggo or Omoda.
Earlier this year, 3Cube Property Solutions published an article detailing the challenges faced by South Africa’s under-revving motor industry. In this follow-up, we’re taking a close look at how newcomers to the market have shaken up the industry and given the established names a run for their money.
How cost competitiveness is influencing buyer decisions
At face value, there’s sometimes not much difference between the price of similarly specced vehicles from established brands and those of their Chinese or Indian counterparts. The shift in consumer preference to Chinese vehicles and those from other eastern countries can be attributed to various factors – but primarily value for money. While the prices may be comparable, Chinese vehicles are more likely to offer sophisticated infotainment, premium finishes and advanced safety tech.
A great example can be found in a comparison between the Hyundai Creta 1.5 Premium and the Chery Tiggo 7 Pro Distinctive. Both vehicles retail for between R410 000 and R450 000 depending on the exact specs you choose. The Chery boasts a turbo-boosted engine, while the Hyundai’s is naturally aspirated. The Tiggo boasts a significantly bigger screen and tri-screen layout. While the Hyundai has fabric seats, the Tiggo offers synthetic leather and a panoramic sunroof. The Hyundai offers superior fuel consumption, but this fades when you discover Chery’s jaw-dropping warranty claim: engine cover for 10 years or up to 1 000 000km. Yes, that’s one million kilometres.
Exponential growth in Chinese vehicle sales
It’s hardly surprising then, that Chinese vehicle brands are growing from strength to strength on South Africa’s roads. Independent Media has done a comparison of first-quarter sales of all Chinese brands from 2020, 2023 and 2025. In the first quarter of 2020, Chinese car and light commercial sales were just 3 247 units, or 2.78% of the total vehicle market. Fast forward to 2023 and these numbers had grown to 9 559 units and 6.98% market share. By the first quarter of 2025, the Chinese brand share had hit double digits, at 11.81% (17 003 vehicle sales).
Severe pressure on homegrown vehicle manufacturers – and looming job losses
The positive news for Chinese manufacturers means bad news for local automotive companies like Combined Motor Holdings (CMH). Daily Investor quotes CMH’s CEO, Jebb McIntosh citing a range of challenges such as a zero-growth economy, high interest rates and the prolific increase in the cost of living. CMH’s operating profit fell by more than 18% in the most recent financial year.
McIntosh also issued a warning of potential job losses unless the government steps in to support local manufacturers. Adding to this sobering reality is the fact that only 10 million of 65 million South Africans can afford a vehicle – let alone a new one.
In May 2025, The National Union of Metalworkers of South Africa (NUMSA) expressed its concern at the risk of Nissan shutting its doors, stating that this move would place 20 000 jobs in jeopardy.
Earlier in 2025, Volvo also announced a downsizing restructuring process that cut their dealership network from 19 to just seven. No data is readily available to indicate the extent of job losses caused by this decision, which is said to be in line with the company’s decision to focus solely on electric vehicles.
How ongoing shifts in the motoring industry are likely to impact the real estate market
As new automakers enter the market – regardless of where in the world they hail from – they will need to establish local assembly operations and regional distribution centres. This will drive demand for factories, warehouses and logistics centres. A prime example of this was Haval’s 2023 move into a larger distribution centre in Waterfall, Midrand. According to Yusuf Patel, head of aftersales at Haval Motors SA, the constraints they had experienced before making the move were “exceptional”. This indicates that other Chinese and Indian motoring brands making their mark on the South African market will also need to increase their footprint over time.
Of course, the concurrent downsizing of other motor brands means that space simultaneously becomes available. Developments in the motor industry may also lead to unprecedented industrial real estate innovation, such as smart warehouses and vehicle storage centres.
As developments continue to force South African automakers to change lanes, 3Cube Property Solutions remains focused on finding your business its ideal premises in Gauteng or the Western Cape. Get in touch if your business needs a new home.