BMW and Volkswagen, who are facing mounting pressure in the luxury cars market in SA from Chinese producers, will not be hurt by President Donald Trump’s administration imposing hefty tariffs on SA imports.
Trump on Monday spooked car producers when he slapped a 30% tariff on SA imports to the US. The two companies said they do not export any vehicle from SA to the world’s largest economy.
“Volkswagen Group Africa doesn’t export to the US. Our Polos built at Plant Kariega are exported to the EU and Asia Pacific markets,” the company said.
BMW SA said it would also not be affected.
“The fourth-generation BMW X3 is manufactured at our facilities in Rosslyn (SA), Spartanburg (US), and Shenyang (China). The Rosslyn plant is the sole location producing the plug-in hybrid (PHEV) version of the BMW X3, which is in particularly high demand in the European market,” BMW SA said.
“At this time, the BMW X3 PHEV is not sold in the US, so there are no exports from the Rosslyn plant to the US market. The internal combustion engine (ICE) variants of the BMW X3 sold to customers in the US are produced at our Spartanburg plant in South Carolina,” it said. “The export of the ICE and PHEV models is therefore determined by the specific demands of each regional market.”
However, it is not plain sailing for the companies in the SA market, with Chinese producers pushing hard for the share of the consumer’s wallet.
Omoda and Jaecoo last week reported record monthly sales in SA, with more than a 1,000 of their new passenger vehicles sold in June — the best monthly sales since entering the SA market in 2023. The June data places the two Chinese brands among the fastest-growing automotive brands in SA, joining their counterparts Haval, Chery and BAIC.
Audi, a subsidiary of the Volkswagen Group, earlier this year said the premium vehicle sector has contracted to nearly a third of its size compared with a decade ago, with 2024 marking the lowest level yet.
Audi has introduced several initiatives to ramp up sales in a tricky environment. These include extending its freeway plan to 15 years and 300,000km of coverage.
SA’s largest second-hand car dealer, WeBuyCars, has enhanced its buying strategy and is positioning itself to integrate popular Chinese brands into its network.
WeBuyCars, which has Toyota, Ford and VW as its top-selling brands, in February said it had taken note of the rise in the popularity of Chinese brands in SA. It said over the past 18 months, SA consumers have embraced the expanding range of Chinese vehicles available in the local market.
The latest Chinese entrant in the domestic market, Jetour, launched in September 2024 with 40 showrooms nationwide, while Chinese manufacturers had 10% of the new-vehicle market share in September.
BMW told Business Day in May that while Chinese brands are making inroads, the group had some advantages that stand it in good stead to ward off premium segment competition.
“While acknowledging the increasing presence of Chinese brands in the entry-level and mid-market segments, the premium sector requires significant brand trust, a strong dealer network and a well-established history of superior performance and luxury,” the group said.
“BMW has cultivated this reputation over decades and confidently asserts its ability to maintain its leadership position in the premium landscape.” /With Nompilo Goba
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