Event

• New passenger car sales hit multi-year highs, totalling 102,268 units in Q1 2025
• Younger buyers and budget-conscious consumers reshape the financing and brand landscape
• South Africa’s younger car buyers are turning to TikTok, Instagram, and YouTube, reshaping the automotive marketing playbook
• New insights on insurance trends highlight growing risk of uninsured vehicles

The latest TransUnion South Africa Mobility Insights Report (formerly the Vehicle Pricing Index) for Q1 2025 highlights a strong rebound in the country’s automotive market. This recovery has been driven by improved consumer sentiment, declining interest rates, access to retirement savings through two-pot withdrawals, and rising real wages. According to naamsa data, new passenger vehicle sales continued their upward trajectory in the first quarter, with monthly volumes averaging over 34,000 units, the highest levels seen since Q3 2015.  

Affordability remains a key driver of vehicle purchasing and financing decisions. Creative financing options, longer ownership cycles, and the growing availability of value-oriented models are significantly reshaping consumer behaviour, particularly among younger and first-time buyers. The Q1 2025 TransUnion South Africa Mobility Insights report highlights that several emerging brands offering competitively priced vehicles have recorded strong year-over-year growth, contributing to the overall surge in new vehicle sales.

“South African consumers are returning to the vehicle market with a clear focus on value and flexibility,” says Lee Naik, CEO TransUnion Africa. “We’re seeing a continued shift away from traditional premium segments in favour of more accessible alternatives that meet evolving needs and budgets.”

Insurance Trends Reveal Shifting Landscape and Rising Risk

The Q1 2025 report introduces new data on insurance-linked vehicle asset finance (VAF). As of early 2025, only 39% of insured vehicle owners had financed vehicles, down from 44% in 2020. This signals a rise in alternative financing or lapses in insurance post-purchase, especially concerning as TransUnion’s  2024 Insurance Survey found that 25% of vehicle users had driven uninsured in the past six months.

This trend has implications for lenders, who face greater asset risk in the event of write-offs without insurance recovery, and for insurers, whose portfolios may now carry increased exposure. To mitigate these risks, strategies such as bundled insurance, usage-based coverage and low-cost flexible insurance models are growing in relevance.

Used Vehicle Momentum Slows as New Sales Lead Recovery
While used vehicles have dominated financing trends in recent years, Q1 2025 marked a notable shift back toward new vehicle purchases, driven by easing interest rates, improved entry-level model availability, and aggressive manufacturer incentives. Notably, the influx of competitively priced Chinese models has attracted budget-conscious buyers away from the used market, fuelling fresh growth in new vehicle registrations.

“Consumers are holding onto their cars for an average of six to eight years, compared to the previous five years, a trend that reflects affordability constraints and a more cautious approach to ownership,” says Naik.

Affordability and Flexibility Drive Change
The report reveals that shifting consumer preferences are reshaping the competitive landscape, with some established manufacturers experiencing year-over-year sales declines while more affordable and value-driven entrants continue to gain market share.

“The definition of value is changing,” says Naik. “It’s no longer just about the price tag, it’s about financing flexibility, long-term ownership costs, and trust in the product. That’s what’s driving consumer decisions today.”

Social Media's Growing Influence on South African Car Buyers

Generation Z’s¹ rising influence, with a 27.9% year-on-year increase in vehicle finance volumes, highlights why social media has become essential for automotive brands aiming to attract younger buyers. As South Africans spend over 3.5 hours daily on platforms like TikTok, Instagram, and YouTube, 76% of users now turn to social media for product research, pushing automotive brands toward digital-first strategies with influencer campaigns, short-form videos, and interactive content, yet South Africa’s low social media ad spend signals a major untapped growth opportunity for marketers.

Social platforms are reshaping how South African consumers research, engage with, and purchase vehicles, particularly among Gen Z and Millennials¹ who expect personalised, digital-first experiences. To stay competitive, brands are adopting influencer collaborations, platform-specific strategies, AI-enabled targeting, and immersive tools like augmented reality and virtual reality. Social commerce is gaining ground as buyers look for seamless, in-app journeys from browsing to booking.

Economic Outlook: Growth with Caution
The broader economic outlook for South Africa in 2025 remains cautiously optimistic, with GDP expected to grow by 1.4%, driven primarily by household consumption. While industrial output remains under pressure, consumer-driven sectors, particularly retail and vehicle sales, continue to show resilience. Vehicle export activity rose modestly by 0.4% year-over-year in Q1 2025, signalling a gradual recovery following the sharp decline in the previous quarter.

“The strong recovery in new vehicle sales is a positive sign,” says Naik. “But sustaining this growth will require policy certainty, infrastructure investment, and structural reforms. Without these, the economy remains vulnerable.”

“The South African automotive sector is adapting to new consumer behaviours and market forces. The insurance gap, affordability options, credit access and rising Gen Z¹ participation will shape the road ahead. Collaboration across industry players is vital for long-term growth,” concludes Naik.

Read the full TransUnion South Africa Mobility Insights Report  here.

¹ Generation X (Gen X): Born 1965–1980; Millennials (Gen Y): Born 1981–1996; Gen Z (Generation Z) Born 1997–2012

ENDS

Notes to Editors: To provide you with timely market insights, we are updating our reporting structure.

Starting this quarter, the Vehicle Pricing Index will be renamed the TransUnion South Africa Mobility Insights Report, reflecting our broader focus on mobility trends. Vehicle Finance data will now be included in the TransUnion South Africa Industry Insights Report (IIR).