Connecting South Africa’s automotive ecosystem through change

Understanding these shifts requires a connected view of the capital, businesses, partners and consumers that make up the automotive ecosystem.

Some of these shifts have their origins in the disruption that followed 2020. Global semiconductor shortages constrained new-vehicle supply, shipping costs increased and domestic road, rail and port challenges added further pressure to supply chains. Vehicle and fuel prices rose sharply at the same time, creating difficult conditions for consumers and the industry more broadly.

Those pressures have not disappeared, but the market that emerged from them is considerably more competitive. New automotive brands, particularly from China, have expanded rapidly in South Africa, while vehicles manufactured in India have become more prominent. The greater availability of competitively priced vehicles has helped moderate new-vehicle inflation and increased pricing pressure, particularly in SUV and crossover segments. [Source: Lightstone, naamsa]

This is reshaping the balance between new and used vehicles. Between 2025 and 2026, the ratio of used to new vehicles financed in SA moved from approximately 1.5:1 towards 1.1:1, consistent with broader changes in vehicle pricing, product availability and consumer demand. [Source: Transunion]

Affordability is also becoming a broader industry calculation.

Fuel prices and efficiency, insurance, maintenance, financing and resale value all shape the total cost of ownership, while hybrids and plug-in hybrids are changing the options available.

Battery-electric vehicles add a further dimension, linking mobility choices to energy infrastructure and investment.

These changes matter beyond the individual consumer because the economics of one part of the automotive market inevitably affect another. Progress therefore depends on connecting the perspectives of consumers, dealers, manufacturers, suppliers, financiers and policymakers rather than viewing each in isolation.

When new-vehicle prices stabilise or face downward pressure, used-vehicle values and finance cycles can come under pressure, with consequences across dealerships, lenders and the secondary market.

Similarly, the success of new automotive entrants depends on more than their ability to sell competitively priced vehicles. Parts availability, dealer networks and after-sales support influence vehicle downtime and ultimately resale values, which in turn affect the economics of financing and future vehicle purchases.

Manufacturing therefore remains an important part of the affordability conversation. Greater local production and localisation of components can improve supply resilience and parts availability and support the broader ownership proposition, while investment in South Africa's manufacturing capacity will become increasingly important as the global industry transitions towards new technologies.

There is also a larger African opportunity. The African Continental Free Trade Area has created the potential for deeper regional automotive value chains and larger markets for vehicles and components produced on the continent. Translating that potential into scale will, however, require progress in areas including infrastructure, logistics, investment and access to finance.

What becomes apparent across all these developments is how interconnected the automotive industry has become, and how important it is to convene the right voices around a shared view of its future.

An OEM considering manufacturing investment has different financial requirements from a component supplier expanding capacity, a dealership funding its operations, a business changing its fleet or a household financing its next vehicle. Yet each sit within the same value chain, and developments in one part of that chain can ultimately affect the others.

This is where an ecosystem approach to banking becomes increasingly relevant. Corporate and investment banking, business banking, insurance, economic insight and vehicle and asset finance each provide a different view of the industry. By connecting these capabilities with relationships across the value chain, Absa can help turn separate perspectives into a more complete understanding of how capital, businesses and consumers move through the automotive economy.

The conversations taking place at naamsa SA Auto Week 2026 reflect that same interconnectedness. As the event marks five years, its 2026 agenda reflect a broad range of industry priorities, including affordability, competitiveness, new-energy mobility, manufacturing investment and regional growth.  As a partner to naamsa, Absa’s role extends beyond supporting an annual gathering: it is to help convene industry and public- and private-sector stakeholders, connect insight with finance and relationships, and sustain the dialogue needed to advance these priorities.

The next phase of South Africa's automotive development will require those conversations to translate into coordinated investment and action across the value chain.

For Absa, that is ultimately what it means to be the Bank of the Automotive Industry: not simply financing the vehicle at the end of the value chain but acting as a connecting partner at the intersection of finance, insight and industry relationships. By bringing those capabilities together, Absa can help South Africa’s automotive ecosystem move forward as one, sustainably and inclusively.

South Africa's automotive industry has not stood still over the past five years. The challenge now is to ensure that its next period of change strengthens the industry from factory floor to showroom, expands opportunity across the value chain and keeps mobility accessible to the consumers on whom the entire ecosystem ultimately depends.