By Terri-Ann Brouwers.
South Africa’s automotive market has posted its strongest quarterly performance in more than a decade. Sales of new passenger vehicles rose 23.4% year on year to 111 697 units in the third quarter.
TransUnion’s Q3 2025 Mobility Insights Report reveals that the rebound was supported by easing interest rates, a firmer rand and sharply reduced new car inflation, which fell to 1.5% – the lowest level since tracking began in 2008.
“Affordability and choice are redefining South Africa’s automotive landscape, “says Lee Naik, CEO of TransUnion Africa.
“Consumers are seeking greater value and flexibility, and manufacturers that meet this demand through innovation and pricing discipline are winning the race for growth.”
The market’s transformation is being driven most strongly by Chinese manufacturers, which expanded nearly nine times faster than the overall market in both Q2 and Q3.
Their combined share has now exceeded 15%, up from about 4% in 2021, fuelled by competitively priced, feature-rich SUVs and sedans that appeal to cost-conscious, tech-savvy buyers.
TransUnion reports that brands such as JAC, GWM, Mahindra and Chery delivered some of the highest year-on-year growth rates, while BMW’s 27% increase shows that premium marques can still thrive with strong product pipelines.
Naik notes that this shift is not temporary. “This isn’t a short-term surge, it’s a structural reset. The success of value-driven models shows how affordability, technology and trust are now the true levers of brand growth in South Africa.”
‘Slight softening’ in sales likely
Despite robust sales, TransUnion’s Consumer Pulse Survey showed a slight softening in purchase intent, with the share of consumers likely to buy a vehicle ‘in the next three months’ easing from 19% in Q2 to 17% in Q3.
Current sales momentum is being sustained by pent-up demand, dealer incentives and fleet renewals rather than broad-based consumer confidence.
Younger buyers remain the most active, with Gen Z and Millennials leading purchasing intent, while older segments remain more cautious.
Income levels play an increasingly important role too. Households earning R200 000 or more per month show the highest intention to buy, while middle- and lower-income consumers continue to be constrained by affordability challenges.
The report highlights a deepening divide in the transition toward electrification.
Internal combustion engine (ICE) vehicles remain the single most preferred category at 42%, but interest in hybrids (39%) and plug-in hybrids (24%) continues to rise.
Younger consumers are driving much of this shift, with Gen Z expressing strong interest in both hybrids and battery-electric vehicles, while high-income households show the highest intention to adopt plug-in hybrid technology.
Lower-income buyers, by contrast, remain largely anchored to ICE vehicles due to affordability barriers.
Connected-car technology
TransUnion’s Q3 special feature, The Connected Road, explores how connected-car technology is reshaping mobility.
While most post-2015 vehicles are equipped with built-in connectivity, global adoption of subscription-based services remains low due to cost concerns.
Naik believes South Africa can avoid international missteps by focusing on applications that enhance safety, reduce insurance costs and improve vehicle management, rather than pursuing gimmicky features with little user value.
Exports up
Export performance also strengthened, with passenger vehicle shipments rising 4.1% year on year following a sharp September rebound of 63.7% – the strongest monthly export performance in six years.
Dealer sentiment improved accordingly, with the RMB/BER Motor Traders Confidence Index rising to 54, its second net-positive reading of the year.
According to Naik, the convergence of affordability, market segmentation, electrification and connectivity marks a pivotal turning point for the sector.
“The future belongs to brands and financiers that master both the value-driven present and the connected, electrified future. Data-led insight will be the bridge that connects today’s strategies with tomorrow’s innovation.”