The Chinese Auto manufacturers have got a solid foot hold into the local car sales in South Africa having doubled their sales numbers since this time last year. I find this alarming as this is a repeat playbook of how the Chinese disrupted local manufacturing and eventually became the main manufacturing hub in the world. This is all being done intentionally and funded by the Chinese government and the sad part is this is being allowed to continue.
Once you destroy the legacy car brands the only brands left will be those that are Chinese and this is their strategy. I could think of nothing worse than only having Chinese cars to choose from and in SA this could happen sooner than later especially when you consider how quickly the 13% market share has been achieved.
Local manufacturers have learned the hard way on all products as the government is not protecting them and this is like an open door leaving them vulnerable to cheaper imports. Economically this is nothing short of suicide as the economy cannot support the number of unemployed people which is continuing to rise and gathering pace.
The SA car market is not huge compared to other countries around the world and why this will be an easier target for the Chinese. The locals who are buying the Chinese cars have no brand loyalty as many of their parents never even owned cars so for many owning a Chinese brand is no different than buying a Mercedes or an Audi or a Haval as this is all about the costs. This is a new generation of car buyers and what they look for is not what people who have owned cars previously would look for.
In SA Toyota is still at the top of the tree when it comes to sales and this is mainly driven by their mini bus taxi offerings as there is still no competition in this sector. At number two Volkswagen has been hit hard and has lost 50% of it's sales within the last 12 months and has since slid into the third spot being replaced by Suzuki of all manufacturers. This is all price driven and nothing else as have you ever driven a Suzuki? I do not even fit into a Suzuki and would never even take one as a rental even if it was for free.
When one looks at the top selling vehicles in SA Toyota has 4 models, Suzuki has 3 models, VW has 2 models and the rest are made up of only 1 of their models namely, Ford, Hyundai, Isuzu and Kia. The remaining two models left are Chinese being Haval and Chery.
When seeing this list of the top 15 the big names are missing with no Mercedes, BMW, Audi or Nissan models present. I expect that within the next 12 months this top 15 list will change significantly with at least 3 or 4 more Chinese models being present with a market share of somewhere above 20% and maybe even as high as 25%.
We all know what happens when Chinese gain market dominance and have removed their competitors because we have seen this all before. Prices will start to rise as the Chinese governments now fall away and you will be paying the same price as what a Mercedes or BMW cost except that option is no longer available and your selection is only Chinese cars.