In recent years Chinese vehicles have gained a major foothold in South Africa, disrupting the market with low prices that have seen them usurp market share from many legacy rivals.
While long-established brands such as Toyota, Volkswagen and Suzuki continue to be the country’s most popular sellers by a wide margin, marques such as Mazda, Renault and Kia have been overtaken by Chinese brands Chery and GWM/Haval, with more recent entrants Omoda and Jaecoo also fast rising up the charts.
There are more than 25 Chinese car and bakkie model ranges to choose from in South Africa, with more being launched regularly. In a cash-strapped market, many consumers have embraced Chinese vehicles for their higher level of features and much lower prices than most well-established brands.
The speed at which the Chinese motor industry has turned itself around has been remarkable. In their improved sophistication and refinement, most modern Chinese cars launched in the past few years are almost unrecognisable from their cheap-feeling forebears of less than a decade ago. They are offered with good warranties, which is also helping to shed their negative reputations.
Those who remain unsure of Chinese brands have concerns about their durability and resale values, however — particularly when compared with brands with proven track records. The popular view is while you save money buying a new Chinese car, you’ll take a bath a few years down the road when it comes to reselling it. But is that true?
The jury is still out on their long-term reliability — but now that modern Chinese cars are beginning to enter the used-car market, we are able to get a feel for what their resale values are.
We’ve taken a look at how two-year-old Chinese models depreciate compared with some well-established brands. The attached list shows a random sampling of cars, what they cost new in 2023 and what they are being advertised for today on platforms such as AutoTrader and Cars.co.za. They are all low-mileage examples under 25,000km. The list is a snapshot of the market.
There are many factors determining resale values, including:
- supply and demand;
- condition;
- transmission type;
- fuel type;
- mileage;
- whether the vehicle is still in production;
- extended warranties;
- maintenance costs; and
- after-sales support.
Also, the advertised price is not necessarily what the used vehicle will sell for.
However, the seemingly widespread perception that Chinese vehicles have inferior resale values is not necessarily borne out by the list:
For instance, examples of South Africa's best-selling Chinese new car, the Chery Tiggo 4 Pro, depreciated just 7.1% (manual) and 11.1% (auto) in two years, comparing favourably with brands such as BMW, Hyundai, Suzuki, Volkswagen and Toyota.
Examples of other popular Chinese sellers such as the Haval Jolion, Haval H6 and Omoda C5 showed higher depreciation of between 16.9% and 23.5% — but still within industry norms and superior to models from established brands such as Renault, Alfa Romeo and Honda.
In a market experiencing an affordability crisis, the rising tide of Chinese carmakers shows brand loyalty is becoming less important to South African car buyers than bang for their buck. If resale values prove as resilient as indicated, it removes another barrier to consumer acceptance of cars from China.
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