Standard Bank reports a significant increase in the purchase of used Chinese cars by consumers in South Africa.
The lender said that a staggering 36% of its vehicle financing for used cars in 2024 was for Chinese brands, up from 20% in 2022, as reported by News24.
Financing for new Chinese vehicles also saw an increase, from 6% to 7.4% over the same period.
Haval is the most popular Chinese brand among Standard Bank vehicle financing clients, followed by Chery and BAIC. More than half of the financing deals for Chinese vehicles originated from Gauteng, followed by KwaZulu-Natal (18%) and the Western Cape (10%).
“Even though Chinese brands currently represent less than 10% of our [new] retail sales, their upward trajectory is remarkable given the challenging market conditions,” said Derrick de Vries, head of automotive retail at Standard Bank Vehicle and Asset Finance.
Local car manufacturers have faced declining sales and exports this year. According to the Automotive Business Council, Naamsa, average new car sales for August decreased by 4.9% and 2,266 units year-on-year domestically, while exports dropped by 34.3% or 14,658 units during the same period.
Emerging Chinese brands have begun to disrupt the local car market, outpacing traditional manufacturers with models like the Tiggo 4, Jolion, and X55 for passenger vehicle sales.
While Naamsa emphasized the need to protect local manufacturers and their investments, its CEO Mikel Mabasa noted that a weakening economic climate has led consumers to seek cheaper options for luxury cars.
President Cyril Ramaphosa meanwhile, is on a state visit to China. Addressing the South Africa-China Business Forum, he stated that South Africa is working towards transforming its economy into a “manufacturing hub."
"We plan to move from being a large importer of manufactured products to being a major exporter."
He highlighted the numerous business opportunities for Chinese companies to manufacture products in South Africa, leveraging the country’s industrial experience.
“We have seen this happen in our automotive industry. We have ambitious plans to modernize our infrastructure by investing in the expansion of ports, rail, and road networks. We are on a path to revolutionize our energy sector in pursuit of low-carbon, climate-resilient development,” the president said.
He also mentioned the potential for collaboration in promoting innovation, technology transfer, and skills development. “By leveraging our respective strengths and exploring new avenues of collaboration, we can create mutually beneficial partnerships.
" Our focus must now be on building stronger business relationships, promoting cultural exchanges and tourism, and creating a favorable business environment. The growth of the South African economy will support the success of the African Continental Free Trade Area, which opens access to a market of over 1.3 billion people,” the president said.
China is currently South Africa’s largest trading partner, with bilateral trade increasing by a third since 2019. South Africa mainly exports minerals and agricultural products to China and imports largely manufactured products from China.
The president pointed to investment opportunities in the electric vehicle sector, renewable energy, green hydrogen, and energy storage, as well as in infrastructure, manufacturing, mining, beneficiation of critical minerals, and the digital economy.
“Let us work together to seize this opportunity and continue to build a more prosperous future for our respective countries,” the president said.
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