Rich South Africans are buying homes in one of the safest countries in Africa
More wealthy South Africans are buying homes in Namibia, ranked as one of the safest countries in Africa, for tax benefits and permanent residency.
The company, which makes the Mahindra Pik-Up brand at its assembly plant near Durban, will boost capacity to 1,500 vehicles a month from 900, Rajesh Gupta, chief executive officer of the local unit said.
The company is also considering assembling other models locally, he said.
Sluggish growth in the continent’s most-industrialized nation has seen South Africans demand more economical cars.
Sales of Mahindra, Suzuki and China’s Chery have jumped, while those of Mercedes-Benz and BMW plunged or stagnated.
In 2014, luxury brands such as Audi, BMW, Mini, and Mercedes-Benz collectively sold around 74,015 vehicles in South Africa.
As of the end of 2024, this number had dropped to 23,881. This translates to a 68% drop in sales—highlighting the stagging amount of South Africans who no longer see these vehicles as an option.
The biggest loser was Mercedes-Benz, dropping 82% to 5,048 sold units in 2024 from 28,99 in 2014. This was followed by Audi (-70%) and then BMW and Mini (-50%).
In contrast, vehicles from Asia—such as Chery, Haval, and Suzuki—have seen massive growth over the same period.
The average selling price of cars has dropped 2.3% in the two years to 2025 to R490,478, according to Toyota, South Africa’s most popular auto brand.
Annual inflation averaged about 4.5% over the same period.
The pick-ups assembled in Mahindra’s Durban plant, which opened in 2018, have become popular with local farmers.
They’re also used by the police in neighboring Mozambique. The company also sells other sports utility vehicles in South Africa including the XUV 3XO, XUV 700, Scorpio-N and Bolero.
Mahindra’s expansion is a rare bit of good news for President Cyril Ramaphosa as his government struggles to reduce the fallout from US President Donald Trump’s 30% tariffs, with the auto and agricultural exports exposed to the biggest hit.
The rise in the mid-market segment has even lured Tata Motors. India’s largest auto maker by sales has tied up with Motus Holdings to distribute its vehicles in the African nation, according to the South African car retailer.
Stellantis NV — the maker of Alfa Romeo and Jeep — is also building a plant in the country to make pick-ups.
Mercedes, which last year produced 70,000 cars in its plant in East London — about 650 kilometers south of Durban — cut a shift and announced it would fire 700 workers last year, even before Trump’s tariffs decimated US demand.
Mahindra — the owner of Automobili Pininfarina, the handcrafter of €2.2 million electric hypercars — also plans to bring EVs to South Africa, according to Gupta.
“We are extremely sure of bringing them sooner than later,” he said, without providing a timeline. The company will offer both the BE 6 & XEV 9e EV lines to South African consumers, he said.
The Mumbai-based company is considering upgrading the plant to assemble vehicles using completely-knocked down parts from a semi-knocked assembly plant, Gupta said.
The expansion has created about 100 direct jobs.
Additional reporting by BusinessTech
Issued on BusinessTech by Bloomberg | https://businesstech.co.za/news/motoring/834697/big-trouble-for-mercedes-and-bmw-in-south-africa/
