infrastructure

• Passenger car sales reached 114,246 in Q4 2025 (up 15.3% year over year), bringing the full-year total to 422,103 – the highest since 2014
• Chinese brands now account for over 17% of total sales, signalling a structural shift in consumer buying behaviour
• Younger buyers and affordability-led demand continue to drive momentum as high-income demand normalises

South Africa’s automotive market closed 2025 at its strongest level in more than a decade, supported by easing interest rates, improving vehicle pricing, and a decisive shift in how consumers evaluate vehicle affordability. While headline sales reflect a clear recovery, underlying patterns reveal a market increasingly shaped by value, sharper segmentation and intensifying competition.

According to the TransUnion South Africa Q4 2025 Mobility Insights Report, new passenger vehicle sales reached 422,103 units in 2025, representing 20.1% year-on-year growth. Momentum remained firm into the final quarter, with 114,246 vehicles sold in Q4, making it the strongest quarterly performance based on volume of the post-pandemic period.

“This recovery is real, but it is far from uniform,” says Ayesha Hatea, Senior Director of Research and Consulting at TransUnion Africa. “What we’re seeing is not a return to old buying patterns, but a more deliberate, affordability-driven market where consumers are weighing value, monthly repayments and long-term ownership costs far more carefully.”

Value Brands Cement a Structural Shift

One of the standout trends of 2025 has been the continued rise of Chinese manufacturers. These Chinese brands expanded at nearly nine times the pace of the overall market, lifting their share to more than 17% of total new passenger vehicle sales, up from less than 5% just four years ago.

Aggressive pricing of enhanced specifications, extended warranties and growing consumer trust have fuelled intensifying competitive pressure across all segments of the market.

“This is no longer a short-term disruption,” Hatea explains. “Value brands are now firmly embedded in South Africa’s automotive ecosystem, and their success highlights how decisively affordability and perceived value are influencing purchasing decisions.”

New Vehicles Regain Ground as Pricing Gaps Narrow

Improved affordability conditions shifted demand back toward new vehicles in Q4. New vehicle registrations rose 30.1% year-on-year, compared with just 0.7% growth in used vehicle registrations, narrowing the gap between the two segments. The used-to-new ratio declined to 2.9, down from approximately 3.8 in 2024.

This shift was supported by record-low new vehicle inflation of 1.2%, alongside 1.9% deflation in used vehicle prices, making monthly repayments on new vehicles increasingly competitive.

These trends align with a broader macroeconomic environment focused on easing pressure on household finances, as reinforced in South Africa’s 2026 National Budget delivered by Finance Minister Enoch Godongwana, which emphasised fiscal stability and moderating inflation. Against this backdrop, TransUnion’s data shows vehicle demand remains highly sensitive to interest rates, fuel costs and financing conditions.

“When repayment gaps narrow, buyer behaviour changes quickly,” says Hatea. “But affordability remains the single most powerful lever in sustaining demand.”

Younger Buyers Drive Momentum as Premium Demand Cools

Consumer sentiment showed modest improvement in Q4, with the share of consumers planning to buy a vehicle in the next three months rising from 17% in Q3 to 19% in Q4, according to the TransUnion Consumer Pulse Survey.

That improvement was driven primarily by younger consumers. Gen Z (ages 18-29) purchase intent increased to 25%, while Millennials (ages 30-45) rose to 21%, compared to 14% for Gen X (ages 46-61) and 7% for Baby Boomers (ages 62-80), underscoring a clear generational divide in demand.

At the same time, demand among high-income households has begun to normalise. While consumers in the highest income segment continued to show the strongest purchase intent at 20%, this marked a notable decline from 34% in Q3, indicating a cooling in premium-led purchasing.

“The centre of gravity is shifting,” Hatea notes. “Growth is increasingly coming from younger, more price-sensitive buyers rather than the top end of the market.”

Electrification Advances, on Practical Terms

Electrified mobility continued to gain traction in 2025, with new energy vehicle (NEV) sales reaching approximately 16,700 units, representing 4% of new passenger vehicle sales, up from just 0.3% in 2021.

Growth remains firmly hybrid-led, with traditional hybrids representing nearly three-quarters of NEV sales, reflecting consumer preference for lower upfront costs and limited reliance on charging infrastructure. Battery-electric vehicles remain concentrated among higher-income buyers.

“South Africa’s electrification journey is progressing, but it is pragmatic rather than aggressive,” says Hatea. “Hybrids are bridging the gap between affordability and sustainability.”

A Market Rebalanced, Not Recovered

As the industry looks ahead to 2026, TransUnion’s data suggests a market that has stabilised but remains finely balanced. “The next phase of growth will be incremental and affordability-driven,” Hatea concludes. “Manufacturers, dealers and financiers that align closely with how South Africans are actually buying, not how they bought a decade ago will be best positioned to compete.”

Read the full Q4 2025 TransUnion South Africa Mobility Insights Report here.