Chinese car prices put pressure on SA’s used vehicle market - TimesLIVE

The influx of competitively priced Chinese vehicles is putting pressure on used car values in South Africa, leaving some owners struggling to trade in their vehicles without settling outstanding finance, according to Combined Motor Holdings (CMH).

In its latest interim results, the JSE-listed motor retailer said the sharp depreciation of Chinese and other Asian brands introduced at discounted prices four to five years ago surprised owners, forcing some to keep their vehicles for longer until trade-in offers aligned with the residual amounts owed to banks.

The trend has added to an already difficult trading environment for used car dealers. CMH, which represents 31 vehicle brands through its dealership network in South Africa, including Chinese and Indian marques, reported a 10% decline in used vehicle unit sales and a 4.7% drop in gross margin.

However, the evidence does not support a blanket assumption that Chinese cars depreciate faster than established rivals.

TransUnion valuation data shows some Chinese models lose value faster than comparable competitors. A 2025 comparison found the Chery Tiggo 4 Pro depreciated by 27.1% over three years, against 20.5% for the Kia Sonet. The Haval Jolion lost 25.4%, compared with 21.7% for the Volkswagen T-Cross.

Other analyses by Cars.co.za, Business Day and AutoTrader have found the resale values of some popular used Chinese models can match or outperform established rivals.

A 2025 comparison found the Chery Tiggo 4 Pro depreciated by 27.1% over three years. Picture: Chery Putting the greatest pressure on the used car market is the growing availability of affordable new vehicles. With Chinese and Indian manufacturers competing aggressively on price and specification, buyers have less incentive to pay relatively high prices for used cars.

According to Lightstone, there has been a general decline in the retained values of used cars as affordable new vehicles from China and India have grown in market share. Lightstone data shows used vehicles began retaining less of their value in the second half of 2023, with the decline continuing over the next three years as more affordable new car alternatives entered the market.

Chinese brands grew their share of the new passenger car market to 16.8% in 2025, from 11.2% a year before, intensifying competition for established manufacturers and creating a growing pool of vehicles entering the secondhand sector.

With secondhand prices declining across the market, it is harder for owners to trade out of finance agreements.

A car need not have unusually poor resale value for its owner to end up in negative equity; the financing structure can be as important as the depreciation rate. Many buyers take finance packages with balloon payments, which lower monthly repayments but require a large lump sum at the end of the term. If the car’s trade-in value is insufficient to cover the outstanding balance, the owner must find additional cash, refinance the balloon where permitted, or keep the car.

There is also a trend for owners to hold onto their vehicles longer, as the maximum period a car can be financed in South Africa has increased to 96 months (eight years), up from the previous 72-month industry standard.

Lightstone’s July 2025 analysis found 72-month finance agreements still accounted for 72% of vehicle finance deals, while 96-month contracts had become the second-most popular term, with a 10% share.