BMW says it has extended its market share in the premium auto segment in South Africa despite competition from lower-priced Chinese brands.
“We're seeing very nice growth year on year,” said Peter Van Binsbergen, CEO of BMW Group South Africa & sub-Saharan Africa. Most of the competing Chinese brands that came onto the market recently had yet to have a serious impact on their business.
“We have seen some customers moving to Chinese brands, but you've also seen quite a few coming back to our dealers within a year or two saying I'd like to trade this in for a BMW or a Mini.”
Van Binsbergen said the premium segment remained stagnant and was yet to recover to pre-Covid levels.
“It's a very tough segment to compete in ... what we are proud of is the fact that BMW [leads] the premium segment by a very large margin compared to our second competitor,” he said.
Affordability remained a barrier for consumers as interest rates were high and this had deterred some consumers from purchasing new cars. The pre-owned market was growing faster than that for new vehicles.
“South Africa is a market that was always destined to have Chinese brands because of the fact that affordability is a challenge," said Binsbergen.
To protect its market share and attract more customers, BMW has revamped its lease-to-buy products and will also tweak some of its offerings to reduce their prices
The German group has been in South Africa for 52 years. Chinese brands have gained popularity in the country recently due to their lower prices compared to European models.
“The South African economy definitely needs some stimulus. We need interest rates to come down. We need that to boost our economy. We need that to boost the car market, which has basically stagnated for years now.” he said.
According to the Automotive Business Council, Naamsa, June’s new vehicle market grew for the ninth consecutive month to 47,294 vehicles, an increase of 18.7% compared to June 2024. But while lower rates had eased affordability marginally, motorists continued to face budget constraints.
Omoda and Jaecoo South Africa, makers of popular Chinese models, said in a statement this week they sold more than 1,009 vehicles in June, a record month for the company since entering South Africa in April 2023. The performance reflected the increasing “demand for vehicles that offer bold design, high-end features and exceptional value, placing Omoda and Jaecoo among the fastest-growing automotive brands in South Africa”.
To protect its market share and attract more customers, BMW has revamped its lease-to-buy products and will also tweak some of its offerings to reduce their prices. With the lease option, customers are able to structure their own plans according to their affordability and lifestyle, the German automaker said.
“We are fairly confident that the system that we offer, the products that we have, the network of dealerships and distribution offer peace of mind for customers. Customers can find what fits their wallet. We will be launching some interesting products over time that try and address different segments of the customers, where we look at their usage and their needs, and try and match that with the product.”
BMW produces the X3 range in Rosslyn, Pretoria, where it employs 6,000 people. Last year, it invested R4.2bn in the plant.
Van Binsbergen said BMW, which over the years had invested R17bn in the South African market, expected to produce 75,000 cars a year, with 96% earmarked for export. But none would go to the US for the next two years as the Trump administration's additional tariffs on auto exports from South Africa are due to kick in this month.
“Tariffs are bad for our auto industry because it is export-driven, and ideally, we need tariff-free access to the markets that we support. The US is an important market for South Africa, for our industry, for BMW. In the past it was about 10% to 15% of our volume, but right now it's not affecting us at all because for this year's production plan and next year, we hadn't planned to export to the US anyway.
“But what's really important is that our government and the Trump government find a bilateral agreement to ensure that the car industry in South Africa can export to the US in the future, just as we have in the past,” he said.
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