Major threat to WeBuyCars and Weelee in South Africa

This is according to TransUnion’s latest Q1 2025 Mobility Insights Report, which suggested more new vehicles are being sold as buyers would rather purchase a new Chinese car at the same price as a pre-owned premium model. 

This trend could pose a new and growing threat to South Africa’s used car market and its dominant players, such as WeBuyCars and Weelee. 

The report highlighted that passenger car sales grew by 20.6% year over year in Q1 2025, up from 14.1% in Q4 2024, reaching 102,268 units, the highest quarterly figure in nearly a decade.

New vehicle sales have seen a resurgence, averaging 34,000 cars sold each month in the first quarter. 

This increase is attributed to improved real wages, easing consumer price inflation, recent interest rate cuts, and payouts from the two-pot retirement system. 

The report further noted that one of the most significant drivers of this growth has been the influx of new Chinese car brands that appeal directly to budget-conscious buyers. 

“South Africa’s car market is shifting from luxury brands to more affordable options, driven by rising financial pressure on households,” the report said. “Consumers increasingly perceive these brands as offering strong value for money.” 

It added that longstanding concerns around spare parts availability and aftersales service are beginning to ease as Chinese brands’ dealer and service network expands.

Transnet highlighted that Chinese brands have increased their market share from 9% in 2021 to 12% in Q1 2025. 

“This growth appears to be coming at the direct expense of traditional original equipment manufacturers (OEMs), whose collective share has dropped from 64% to 53% over the same period,” it said. 

Pressure on the second-hand market

The combined year-over-year growth of Chinese brands across new passenger and light commercial vehicle sales reached 64.6% in Q1 2025, with brands like BAIC, JAC, Foton, Jetour, OMODA, and JAECOO expanding their presence. 

Meanwhile, Suzuki saw a 19.8% year-over-year increase, and India’s Mahindra posted an extraordinary 71.8% surge.

“This growing demand for affordable new models is starting to squeeze the used car market,” said Transnet. 

New passenger vehicle registrations surged by 19.1% in Q1 2025 compared to the previous year, with the strongest growth in the Free State (24.6%), Gauteng (23.2%), and the Eastern Cape (19.9%). 

In stark contrast, used passenger vehicle registrations fell to 0.9% growth in Q1 2025, down from 4.7% in Q4 2024. 

TransUnion said this shift is driven by easing interest rates, improved availability of entry-level models, and aggressive incentives from Asian manufacturers.

These factors pull prospective buyers away from second-hand vehicles and toward new ones.

“South Africa’s import dependency, especially on more affordable vehicles from India and China, is reshaping the competitive landscape and putting pressure on local manufacturers,” the report explained. 

Chinese automakers focus heavily on affordability, innovation, and SUVs, a highly popular segment in South Africa. 

Additionally, the country’s BRICS membership is accelerating automotive imports from China, which is raising questions about the long-term competitiveness of traditional OEMs.

WeBuyCars responds

Despite these pressures, WeBuyCars CEO Faan van der Walt believes the impact on the used car sector has been muted so far. 

In response to the TransUnions report, Van der Walt told BusinessTech that cheap Asian cars are still a primary concern for new premium car brands in South Africa at this time, and welcomes the new entrants. 

“The Asian affordable vehicles have definitely impacted the market, but we see this primarily affecting premium brand new car sales and a challenge to the traditional players,” said Van der Walt. 

“WeBuyCars has not seen a noticeable impact on its higher value vehicles so far, but the majority of our inventory currently sits in lower value and older cars.” 

He added that South Africa has seen numerous new brands entering the market in recent years, and it is difficult to determine which ones will end up challenging the traditional OEMs, much like the Korean brands did 20 years ago. 

“However, we welcome the entrance of these affordable brands as they have sparked interest from buyers and expanded the car pool, which will flow through to the used car market in a few years,” he said. 

BusinessTech contacted Weelee for comment on the TransUnion report, but the company had not responded by the time of publication.

Issued on BusinessTech by Malcolm Libera | https://businesstech.co.za/news/motoring/828140/major-threat-to-webuycars-and-weelee-in-south-africa/