Data from Standard Bank showed that the the proportion of Chinese car brands increased from just over 6% in 2022 to 7.4% in the first half of 2024. Picture: Supplied
Standard Bank yesterday said the proportion of Chinese cars being sold in South Africa is on the increase, highlighting popularity of vehicle brands from the Asian country against the backdrop of data from the Automotive Business Council (Naamsa), which showed SA car sales volumes declining in the second quarter.
The South African auto industry is banking on interest cuts expected for later this month to boost vehicle sales volumes. This after the country’s auto sales for the month of August slumped by 4.9% compared to the same month a year ago.
According to Naamsa, aggregate domestic new vehicle sales in August fell by 2 266 units to 43 588 units, down from the 45 854 vehicles sold in August 2023.
In spite of this, Chinese car brands were experiencing a surge in popularity across South Africa, defying market challenges, said Standard Bank, which finances vehicle purchase schemes.
“Despite overall retail sales facing pressure, the number of Chinese cars financed by Standard Bank Vehicle Finance has consistently increased year-on-year since 2022,” said the bank.
Data from Standard Bank showed that the the proportion of Chinese car brands increased from just over 6% in 2022 to 7.4% in the first half of 2024.
GWM Haval, is the most popular Chinese brand financed by Standard Bank since 2022 followed by Chery and BAIC.
Derick De Vries, the head of automotive retail for Standard Bank’s Vehicle and Asset Finance, said this growth was significant given the decline in new vehicle sales.
“Even though Chinese brands currently represent less than 10% of our retail sales, their upward trajectory is remarkable given the challenging market conditions,” he said.
“We are seeing a notable shift in the South African automotive market because of the popularity of Chinese car brands. We constantly see GWM brands in the top ten of Naamsa’s Vehicle Sales by Manufacturer list.”
According to Naamsa’s quarterly reviews, SA vehicle sales volumes have been declining on a year on year basis since the third quarter of 2023.
In the second quarter of 2024, new vehicle sales dropped by 9.6% compared to the corresponding quarter in 2023. In contrast, Standard Bank had over the same period “financed more new Chinese car” brands.
This comes as electric and hybrid vehicles, mainly from China are expected to increase over the next few years. In Gauteng, Standard Bank concluded 54% of Chinese car brand deals, 18% in KwaZulu Natal and 10% in the Western Cape.
Standard Bank was also seeing an expansion in the used car market for Chinese brands. The proportion of used Chinese car brands financed by the bank increased from 20% in 2022 to 36% in July 2024.
According to Naamsa, South Africa’s vehicle export sales plunged by a significant 14 658 units, or 34.3%, to 28 073 units in August compared to the 42 731 vehicles exported during the same month last year.
“The downward slide in vehicle exports continued during the month in line with declining exports to Europe due to weak regional economic activity,” Naamsa said.
“However, Eurozone inflation fell to 2.2% in August 2024, its lowest level in more than three years, thanks to falling energy costs, raising expectations of a further European Central Bank interest rate cut in September 2024.”
BUSINESS REPORT