South Africa’s automotive industry has changed substantially over the past five years, with greater competition, changing vehicle-price dynamics and the emergence of new-energy vehicles
These developments have altered both the economics of vehicle ownership and the structure of the market around it
Understanding these shifts requires a connected view of the capital, businesses, partners and consumers that make up the automotive ecosystem
Some of these shifts have their origins in the disruption that followed 2020
Global semiconductor shortages constrained new-vehicle supply, shipping costs increased and domestic road, rail and port challenges added further pressure to supply chains
Vehicle and fuel prices rose sharply at the same time, creating difficult conditions for consumers and the industry more broadly
Those pressures have not disappeared, but the market that emerged from them is considerably more competitive
Competition is reshaping vehicle affordability
New automotive brands, particularly from China, have expanded rapidly in South Africa, while vehicles manufactured in India have become more prominent
According to the National Association of Automobile Manufacturers of South Africa (Naamsa) and Lightstone, the greater availability of competitively priced vehicles has helped moderate new-vehicle inflation and increased pricing pressure, particularly in SUV and crossover segments
This is reshaping the balance between new and used vehicles. TransUnion data shows that between 2025 and 2026, the ratio of used to new vehicles financed in South Africa moved from approximately 1.5:1 towards 1.1:1, consistent with broader changes in vehicle pricing, product availability and consumer demand
Affordability is also becoming a broader industry calculation
Fuel prices and efficiency, insurance, maintenance, financing and resale value all shape the total cost of ownership, while hybrids and plug-in hybrids are changing the options available
Battery-electric vehicles add a further dimension, linking mobility choices to energy infrastructure and investment
These changes matter beyond the individual consumer because the economics of one part of the automotive market inevitably affect another
The automotive industry depends on connectivity
Progress therefore depends on connecting the perspectives of consumers, dealers, manufacturers, suppliers, financiers and policymakers rather than viewing each in isolation
When new-vehicle prices stabilise or face downward pressure, used-vehicle values and finance cycles can come under pressure, with consequences across dealerships, lenders and the secondary market
Similarly, the success of new automotive entrants depends on more than their ability to sell competitively priced vehicles
Parts availability, dealer networks and after-sales support influence vehicle downtime and ultimately resale values, which in turn affect the economics of financing and future vehicle purchases
Manufacturing therefore remains an important part of the affordability conversation
Local manufacturing can unlock growth
Greater local production and localisation of components can improve supply resilience and parts availability and support the broader ownership proposition. Meanwhile, investment in South Africa’s manufacturing capacity will become increasingly important as the global industry transitions towards new technologies
There is also a larger African opportunity. The African Continental Free Trade Area has created the potential for deeper regional automotive value chains and larger markets for vehicles and components produced on the continent
Translating that potential into scale will, however, require progress in areas including infrastructure, logistics, investment and access to finance
What becomes apparent across all these developments is how interconnected the automotive industry has become, and how important it is to convene the right voices around a shared view of its future
An original equipment manufacturer considering investment has different financial requirements to a component supplier expanding capacity, a dealership funding its operations, a business changing its fleet or a household financing its next vehicle
Yet each sits within the same value chain, and developments in one part of that chain can ultimately affect the others
This is where an ecosystem approach to banking becomes increasingly relevant. Corporate and investment banking, business banking, insurance, economic insight and vehicle and asset finance each provide a different view of the industry
Investment in South Africa’s manufacturing capacity will become increasingly important as the global industry transitions towards new technologies
— Charl Potgieter, Absa Vehicle and Asset Finance managing executive
The conversations taking place at Naamsa SA Auto Week 2026 until October 16 in Durban reflect that same interconnectedness
As the event marks five years, its 2026 agenda reflects a broad range of industry priorities, including affordability, competitiveness, new-energy mobility, manufacturing investment and regional growth
As a partner to Naamsa, Absa’s role extends beyond supporting an annual gathering. It will help convene industry and public- and private-sector stakeholders, connect insight with finance and relationships, and sustain the dialogue needed to advance these priorities
The next phase of South Africa’s automotive development will require those conversations to translate into coordinated investment and action across the value chain
For Absa, that is ultimately what it means to be the Bank of the Automotive Industry: not simply financing the vehicle at the end of the value chain but acting as a connecting partner at the intersection of finance, insight and industry relationships
By bringing those capabilities together, Absa can help South Africa’s automotive ecosystem move forward as one, sustainably and inclusively.
South Africa’s automotive industry has not stood still over the past five years. The challenge now is to ensure that its next period of change strengthens the industry from factory floor to showroom, expands opportunity across the value chain and keeps mobility accessible to the consumers on whom the entire ecosystem ultimately depends
About the author:Charl Potgieter is the managing executive at Absa Vehicle and Asset Finance
This article was sponsored by Absa