Are affordable new vehicles putting pressure on used car prices?

Used vehicles have lost retained value and the weighted average of new vehicle prices has stabilised at the same time as affordable new vehicles from China and India have grown market share.

An analysis of data by Lightstone suggests competitive pricing from Chinese brands and Indian-made vehicles not only provide alternative options for cost-conscious car buyers but, could help explain the pressure on used vehicle retention value, and the stabilisation of the weighted average of new vehicle prices.

Chinese brands and Indian-made vehicles have increased market share with weighted average prices lower than the rest of the market in recent years, while Lightstone’s analysis shows used vehicles began retaining less of their value in the second half of 2023 compared to the first half, and the value continued to decline over the next three years.

When used cars started to lose some of their retained value in 2023, new vehicle prices (on a weighted average basis) began to stabilise, and even come down. From the beginning of 2021 to 2023-Q3, the weighted average price of a new Passenger vehicle climbed by an average of over 6.5% year-on-year.

But, since 2023-Q4, that weighted average price has dropped by an average of 0.1% year-on-year.

Depressed used vehicle pricing is usually indicative of a used vehicle market which is under pressure, while the recent trend in the weighted average price of new Passenger vehicles is a sign that new vehicle buyers are leaning towards more affordable options.

So, how does the data, which only accounts for makes and OEMs which report vehicle sales to naamsa, tell a story?

The weighted average price of New Passenger Vehicles relative to headline CPI as reported by StatsSA levelled off in mid-2023 and showed signs of contracting over the last ten quarters. It has hovered below CPI since 2024-Q3, as the graph below shows. The Consumer Price Index has climbed reasonably steadily since 2019.

New Passenger Vehicle Weighted Average Price vs Headline CPI

Source: StatsSA (Statistics South Africa)

The graph below shows a two-year-old Passenger car’s retained value reached a peak (90%) in the first half of 2023. It experienced a fairly steady slowdown after that, at a similar time the weighted average price of new cars began to stabilise. The decline in the retained value of a 2-year-old Passenger car indicated that the used vehicle market is not as strong as it was prior to the first half of 2023.

New Passenger Vehicle weighted average price vs 2-year-old Passenger car retention

As the graph below shows, if the weighted average price of a new Chinese-branded vehicle is split out against the rest of the Passenger market, the average price of a Chinese car has hovered around the R450 000 mark since 2023.

This mirrors the consistency of non-Chinese brands over the same period, and it is all the more interesting given the price gap between Chinese and non-Chinese brands closed over the period, following a change in strategy by those Chinese brands selling in South Africa at the time.

Timeline of Chinese brands in the SA Passenger market:

New Passenger Vehicle weighted average price (Chinese and non-Chinese) vs 2-year-old Passenger car retention

Although the weighted average price of Chinese vehicles has narrowed, sales have continued to climb, and Chinese brands broke through the 20% barrier in the first two months of 2026 as 2-year-old Passenger car retention values fell.

The share of new Passenger sales attributed to Chinese brands was coasting along at under 5% until the second half of 2022, when it jumped to almost 10% by year-end, coinciding with the reintroduction of the Chery brand into South Africa.

Chinese-branded share of new Passenger Vehicle sales vs 2-year-old Passenger car retention

The gap between the New Passenger Vehicle weighted average price of an Indian-built vehicle and that of the rest of the market widened from 2019 to 2026-Q1.

In the second half of 2023 (as the rate of retention in used car values began to decline) the average price of Indian-built vehicles settled at around R300 000 for a prolonged period.

Timeline of OEMs importing Passenger cars from India:

New Passenger Vehicle weighted average price (Indian-built and non-Indian-built) vs 2-year-old Passenger car retention

After growing market share through the first two years of the period under review, Indian Passenger imports lost ground through 2022 and the first half of 2023. Since then, there has been steady growth in share of the Passenger market, reaching 50% in the early part of 2025. The graph below shows the falling 2-year-old Passenger car retention compared to the rising share of the market by Indian-built Passenger Vehicles.