OPINION | Is South Africa’s auto market at a turning point?

By Muhammed Ebrahim The proliferation of new vehicle brands in the South African market presents both a significant competitive challenge and an important opportunity for established vehicle manufacturers.

New models, particularly from Asia, are expanding choice for price-sensitive consumers while driving some of the most significant structural changes to the domestic vehicle market in decades.

These brands are increasingly appealing to younger buyers, combining attractive design with advanced technology, while generally offering more competitive pricing than established manufacturers.

This is particularly compelling in a market where households are facing squeezed disposable incomes as a result of rising living costs and elevated consumer debt.

The result is an increasingly crowded South African vehicle market, with more global brands entering, or expected to seek a foothold, in the country.

For established manufacturers, this represents both a threat and an opportunity.

It is a threat to previously dominant and relatively captive market positions, as the battle for customers is increasingly being fought across pricing, technology, after-sales service, dealer support and parts availability at reasonable prices.

At the same time, it is an opportunity for established manufacturers to demonstrate why their brands have earned the trust and loyalty of South African consumers over decades.

They must continue meeting established customer expectations while innovating to defend and grow market share.

Against this backdrop, established manufacturers should be asking: “What do we continue doing?”, followed by: “What should we do differently?” The answer to the first question is to protect the fundamentals that have built customer trust while continuing to innovate.

The South African vehicle market has historically demonstrated that customers are often willing to pay more for a used vehicle from a brand they perceive as reliable than pay less for a new vehicle from a brand that has yet to establish a track record.

When it comes to a major purchase such as a car, customers tend to gravitate towards what they know.

Familiarity provides a sense of certainty and reduces perceived risk.

But customer behaviour can change quickly.