Vehicle imports are changing gear, with cheaper Chinese brands making an impact and sparking government interest in electric vehicles.For new vehicle imports, the major shift is the origin of the vehicles.According to naamsa|The Automotive Business Council, 59.3% of the country’s total light new-vehicle sales in 2023 were imported cars. In a total market of 498 880 new units, 295 817 were shipped from 24 countries.South Africa also imports large quantities of components for local manufacturing, the bulk of which are exported as fully built-up vehicles.According to Transnet, two out of every three vehicles manufactured in South Africa are exported.Export-import trade intelligence platform Volza reports that South Africa imported 4 394 shipments of auto components between March 2023 and February 2024, mainly from India, Turkey and the United States.A preferential agreement results in imported vehicles from the EU paying only 18% duty.Chinese brands are benefiting from the economic pressure on consumers, according to Jebb McIntosh, chief executive officer of Combined Motor Holdings.He writes in the company’s annual report that local currency weakness has made vehicles manufactured in Japan and Europe increasingly unaffordable in this country and other emerging markets. “The international trend has been to move manufacturing to either India or China.”More than half the vehicles sold in South Africa now come from the two countries. “This has placed strain on local manufacturers because their production is too expensive for the majority of local buyers,” he says.The group is benefiting through increased demand for spares for the Chinese marques.Mandarin Parts Distributors, which specialise in parts for vehicles sourced from China and India, reported a 20% increase in profit.These trends were confirmed by naamsa chief executive officer Mikel Mabasa in his briefing at the close of SA Auto Week 2024.“The SA automotive market faces affordability issues, driven by low incomes and rising prices. This has led to the emergence of new competitors offering affordable options, disrupting the market and highlighting the need for strategic responses from local players. “The excessive tax burden on a vehicle in South Africa is a root cause of the problem, with a luxury tax having now been imposed on entry-level vehicles,” he said.Import duties on internal combustion-driven vehicles are 18-25%, depending on origin, and 25% on electric vehicles. Original equipment components attract a tax of 20%. This could change. Speaking at Automotive Week, President Cyril Ramaphosa said the government was working “hand-in-hand with the private sector to promote the production of new energy vehicles (NEVs) and the development of the necessary infrastructure to support them”. The government is covering all bases, with guidelines still in the pipeline to include hybrids and plug-in hybrids. “Consideration must be given to incentives for manufacturers as well as tax rebates or subsidies for consumers to accelerate the uptake of electric vehicles. “This is not just about creating a greener future but also about ensuring South Africa remains competitive in the global market,” he said. ER
