South Africa’s vehicle market remains resilient, but affordability pressures and changing consumer behaviour are forcing vehicle dealers to rethink how they engage with customers, credit reporting agency TransUnion Africa MD Lee Naik said in an address at DealerCon 2026, in Johannesburg, on September 17.

Naik’s comments coincided with the launch of the Cars.co.za 'Industry Report 2026', which draws on online automotive marketplace Cars.co.za's site and lead data, a consumer survey of more than 2 000 vehicle shoppers, TransUnion credit and affordability insights and financial services company Absa Vehicle and Asset Finance's analysis of 2.56-million finance applications.

The report shows that new passenger vehicle sales reached their highest monthly level since September 2014 in July this year. However, affordability is increasingly constraining consumers, with the interest rate at 7%, financial optimism declining from 71% to 66%, and 53% of consumers reporting cuts to discretionary spending.

Naik said the industry needed to understand this pressure as part of a broader “affordability equation”, rather than viewing vehicle affordability solely through the purchase price.

“The affordability equation doesn't feel like it's your individual responsibility, but it can be what differentiates you,” he said.

Consumers were increasingly considering the full cost of ownership, including fuel, insurance, tyres and other household expenses, he added.

Further, Cars.co.za chief innovation and product officer Alan Quinn said the shift was also reflected in consumer vehicle choices as the Cars.co.za survey found that price was the most important consideration for 70.8% of respondents, followed by fuel efficiency at 52.5%.

“The 2026 report shows that South Africa’s vehicle market remains resilient, but consumer decision-making is changing. Affordability is shaping behaviour more than ever, while Chinese brands are moving firmly into the mainstream.

“For dealers, understanding how buyers discover, research and choose vehicles will be critical to converting demand into sustainable growth,” Quinn added.

Meanwhile, Naik said the industry was also seeing an increase in the used-to-new vehicle substitution ratio, indicating that some consumers were reassessing the balance between new and used vehicles as affordability pressures increased.

At the same time, he pointed out that Chinese manufacturers were rapidly increasing their presence in the vehicle market.

The report also shows that Chinese vehicle sales grew by 72% year-on-year in the second quarter of 2026, compared with 3% for traditional manufacturers, taking their combined market share to about 22%. Moreover, Absa data shows Chinese brands accounting for 40% of SUV finance applications, up from 19% in 2023.

Naik similarly highlighted the growth of Chinese vehicles, saying their share of the market had risen to about 20%, while about one in five SUV finance applications was now for a Chinese SUV.

He said this demonstrated how perceptions of value were changing, with traditional brand loyalty increasingly being challenged by affordability and the value proposition offered by newer entrants.

The Cars.co.za report also points to a changing consumer journey, particularly as social media is becoming the leading source of vehicle discovery, while test drives and written reviews become more important once consumers have shortlisted vehicles.

The report noted that most survey respondents say a vehicle's country of manufacture does not influence their decision.

New-energy vehicles (NEV) are also gaining ground, although they remain a niche category. Hybrid vehicles accounted for 1.74% of new and used Cars.co.za listings in 2026, up from 0.14% in 2020.

According to this report, EV buyers have a median income of R115 000, compared with R73 000 for internal-combustion-engine buyers, while BYD accounts for 61% of EV finance applications in Absa's data.

Additionally, Naik said changing consumer behaviour was also being accelerated by digital technology and AI, which had given consumers greater access to information and reduced businesses' control over the buying journey.

“The consumer has their feet and their hands and their laptops, they've got AI, they've got data, they've got [the] insights,” he said.

This, he said, made trust increasingly important as dealers would need to demonstrate integrity, transparency and accountability, particularly as digital and AI-enabled systems became more prevalent.

For dealers, both the report and Naik's address point to the importance of understanding the consumer beyond the vehicle purchase itself.

Naik said the industry needed to consider the customer journey cohesively, incorporating finance, servicing, post-sale costs and complaints.

As affordability pressures persist and consumers gain greater choice and access to information, the ability to demonstrate value and build trust throughout the customer journey is becoming an increasingly important consideration for South Africa's vehicle retail industry.