In the first quarter of 2026, one of the five new cars sold in South Africa was of Chinese manufacture. This statistic seems incredible compared to a decade ago, when Chinese brands held a negligible share of the market, and some brands, such as Chery and Geely, left the country because they failed to gain consumer trust.
However, about five years ago, Chinese manufacturers returned with strong momentum and an effective strategy. Greg Cress, Head of Automotive and EV at Accenture in Africa, called it 'a breakthrough the industry has been waiting for a hundred years.' He compared the current situation to the arrival of the iPhone in the automotive industry, emphasizing that the observed changes are a structural shift, not just a cyclical phenomenon.
Data from the industry body Naamsa confirms this trend: Chinese manufacturers accounted for over 19% of total new car sales in the first quarter of 2026. Sales grew by 75% year-on-year, while growth in the passenger and light commercial vehicle segments was 12.7%.
In the passenger car market, the share of Chinese brands increased from 11.2% in 2024 and less than 9% at the beginning of 2023 to 16.8% in 2025. Naamsa, according to its 2026 Automotive Trade Guide, agrees with Cress, stating that this is not a short-term spike but a 'structural reset.' The market, which was defined by brand prestige for decades, is now being redefined by consumer choice driven by prices and limited family budgets.
The first wave of Chinese participants, including Chery, which appeared in the late 2000s, was forced to retreat and revise its tactics. However, the current second wave is characterized by a more structured, planned, and aggressive implementation. In 2024, eight Chinese brands were active in the market, and by the end of 2025, their number grew to 18, with plans to increase in 2026. Chinese brands now account for almost 40% of all passenger brands in local dealerships.
The strategy of these companies is based on three elements: offering mid-sized SUVs with high value at very aggressive prices, backed by longer warranties compared to established brands. Cress rejects the idea that this is simply a price war.
Sales figures demonstrate this trend. Chery, relaunched in late 2021 with the Tiggo 4 Pro model, sold 25,304 vehicles in 2025, a 26.7% increase, securing eighth place. GWM showed a growth of 43.7% and took sixth place, regaining the title of best-selling Chinese brand. If the sales of Chery, Omoda, Jaecoo, and Jetour are combined, their total volume exceeded that of Volkswagen Group at the beginning of 2026 and approaches Suzuki, which holds second place.
Consumer demand was stimulated by falling interest rates, record low inflation for new light vehicles (1.1%), and pension payouts. As a result, overall industry sales grew by 15.7% in 2025, reaching 597,338 units—the best figure since 2015. Furthermore, 64.2% of light vehicles sold cost less than 500,000 rand, which is the segment actively being captured by newcomers. Norman Lamprecht, Director of Trade and Research at Naamsa, noted that new players have achieved significant success in the small and entry-level segments.
The rise in popularity of Chinese brands coincided with a sharp drop in sales of German premium brands, which previously symbolized desired transportation in South Africa. Total sales of Audi, BMW, and Mercedes-Benz fell from slightly over 74,000 units in 2014 to less than 24,000 in 2024, representing a decline of 68%. Mercedes-Benz was hit hardest, with its annual sales over the decade shrinking by more than 80%, causing it to fall out of the top 10 sellers.
Cress believes that major German and Korean manufacturers likely cannot compete with the price level offered by Chinese companies. This forces them to retreat into the premium niche, but the question remains whether the volume and margin in this segment of the South African economy are sufficient to sustain production capacity.
South Africa is not only a car market but also a manufacturing base. In 2025, the industry contributed 5.2% to GDP, and the production of vehicles and components accounted for 23.8% of the country's industrial output. According to official Naamsa data, vehicle exports reached a historic high of 414,268 units, valued at 229.8 billion rand. Nevertheless, this record hides serious problems.
Exports to North America plummeted from 25,554 units in 2024 to 6,530 in 2025 after Washington introduced a 25% Section 232 tariff. Growth in supplies to Europe and the rest of Africa helped maintain overall growth. However, employment in manufacturing companies and component suppliers decreased. Data provided to TechCentral ahead of the Naamsa Q2 2026 review shows a 5% year-on-year drop in exports for this quarter, although Africa remains a bright spot.
Cress noted that BMW partially offset the US impact by redirecting X3 exports to Canada. Mercedes-Benz proved more vulnerable: its East London plant, which exports over 90% of its C-Class output, cut about 700 jobs in 2024 and suspended production for over a month in mid-2025. Reports indicate that GWM is negotiating joint plant usage, and the C-Class faces strong demand.
While truck manufacturers appear more resilient for now, even their positions are threatened by new powertrains, such as the BYD Shark plug-in hybrid. Toyota, whose Hilux assembled in Durban was a bestseller in 2025, is also considering a transition to a fully electric version, indicating the seriousness of the threat to traditional players.
Simultaneously, the domestic market is becoming increasingly reliant on imports. Light vehicle imports rose by 28.6% in 2025, exceeding 391,000 units, with China alone supplying over 91,000 vehicles. This influx caused a rift in the industry: former Naamsa CEO Mikel Mabasa called the influx a 'fantastic' signal for local assemblers, which drew sharp condemnation from the Numsa union, warning of factory closures and further job losses.
However, reports of potential import duties up to 50% on Chinese and Indian cars turned out to be exaggerated. Lamprecht explained that this was merely a statement regarding the maximum ceiling rate for customs duties under the World Trade Organization.
The key test to determine whether the Chinese wave will strengthen or deplete South Africa's industry takes place in Rosslyn, near Pretoria. Chery won an auction against GWM for the abandoned Nissan plant in January and officially opened it in July. The first locally assembled Chery vehicles are expected from mid-2027. BAIC began assembling components for its B30 SUV in Gqeberha, and GWM is exploring joint truck assembly.
Cress sees Rosslyn as the start of 'new energy vehicle reindustrialization.' The Chery deal 'essentially secured' the jobs of most of the approximately 800 workers and contractors remaining after Nissan's departure. The company is preparing to produce products significantly more advanced than existing local models. Since EVs produced at this plant are exempt from import duties, 'in the next two to three years we will see very competitive products from Chery.'
Nevertheless, there are limitations. A large part of employment in the automotive ecosystem is concentrated in component suppliers—manufacturers of clutches, gearbox parts, exhaust systems, and catalytic converters—'all products that will no longer be needed in the world of new energy vehicles.' Building a battery supply chain requires building a new infrastructure almost from scratch, and policy must stimulate this. Cress believes that cementing Chery's production roots is 'likely a necessary step, but whether it is enough is a question.'
Justin Barnes, Executive Chairman of the consulting firm B&M Analysts, describes this test in harsher terms: 'The key for the South African automotive industry is whether Chinese OEMs take South Africa seriously as a manufacturing base. If they do, they will surely fill any gaps in the local manufacturing landscape, but if not, we may expect further decline in the South African automotive value chain and continued growth in imports.' He notes that it is 'too early to draw conclusions, and the signs are still mixed,' although he calls Chery's acquisition in Rosslyn a 'positive development.'
What is happening in South Africa is part of a continental strategy. Having been excluded from the US due to 100% tariffs on Chinese EVs and facing high EU duties on the same vehicles, Chinese manufacturers have pivoted towards Africa. Chery's CEO in South Africa, Tony Liu, called the country 'the company's gateway to the African continent.'
Cress insists that South Africa should view this as an opportunity, not a threat. Chinese investment brings skills in electronics and high-voltage engineering and can form the basis for exporting to a continent that is electrifying faster than many assume. In his view, Africa should not become a 'dumping ground for internal combustion engine technology'; countries like Ghana, Rwanda, Ethiopia, and Kenya have progressive policies on electric mobility. However, competition for this role is very high, and 'Morocco can serve Europe much more effectively than us. We need to be even more competitive in our policy to not only retain existing brands but also attract more.'
Cress believes that New Energy Vehicles (NEVs) are more of an accelerator than the main topic right now. NEV sales grew by only 7.1% in 2025, accounting for 2.8% of the market. Then came the breakthrough: data ahead of the Naamsa Q2 2026 review shows that NEV sales jumped by 134.3% year-on-year, reaching 8,611 units, or 5.6% of total sales, surpassing the 5% mark for the first time. This was supported by new players such as BYD, which only started reporting sales in March 2026.
Independent demand data confirms this. According to the East Meets Electric report from OLX Group, demand for electric vehicles on AutoTrader grew by 154.6% in June 2026, the second fastest growth among the five markets tracked by the group. AutoTrader CEO George Mignay attributes this success to Chinese manufacturers 'offering cars that align well with local priorities regarding affordability, technology, and practicality.'
However, the same report underscores Cress's caution: South Africa shows the highest consumer demand for Chinese brands among all markets tracked by OLX—7.31% of inquiries led by Haval—but only 0.3% of this demand is for electric vehicles, as buyers prefer gasoline and hybrid SUVs.
Tony Liu stated: 'Based on our experience in China, once the share of new energy vehicles reaches almost 10%, demand will explode.' Cress added that if Chery builds a full EV in Rosslyn, it will set an example for other OEMs. Cress concluded: 'The question is not whether Chinese brands should be here in South Africa. I think consumers have already given the answer.'
BYD introduced the Racco, its first kei vehicle, in Japan on Tuesday, the 28th. This launch marks the first time a foreign brand enters this automotive segment, which is crucial for the Japanese market. The electric car was specifically designed for the country, unlike adapted Chinese models, allowing the manufacturer to compete directly with Suzuki, Daihatsu, Honda, and Nissan.
The Racco line offers three options, all including consumption tax: the Racco 200, priced at 2,145,000 yen; the Racco 300 Plus, at 2,398,000 yen; and the Racco 300 Premium, valued at 2,497,000 yen. In direct conversion, these values correspond to between R$ 66,816 and R$ 77,781. The model name refers to the rakko, which means sea otter.
Kei cars are legally classified in Japan, requiring the vehicle not to exceed 3.40 meters in length, 1.48 meters in width, and 2 meters in height. Furthermore, the engine must have a capacity limited to 660 cubic centimeters and a maximum power of 64 horsepower. Conversely, owners of these vehicles pay lower taxes and insurance, establishing this category as the most popular in the country.
The data demonstrates BYD's interest in this niche: in 2025, 1,667,360 kei cars were registered in Japan, representing 36.5% of all 4,565,777 new vehicles sold that year, according to reports from Japanese dealer and light vehicle associations. Thus, more than a third of the market is concentrated in this specific format.
The Racco meets legal requirements with minimal margin, featuring a length of 3.39 m, a width of 1.47 m, and a height of 1.80 m. Its front engine generates exactly the 64 maximum hp permitted by law, along with 16.3 kgfm of torque, and the cabin accommodates up to four occupants.
Before the launch of the Racco, the brand had already been selling passenger cars in Japan since January 2023, having delivered just over 7,400 units by the end of 2025. In 2025 alone, the company registered 3,870 registrations, a 62% increase, according to the Japan Automobile Importers Association. In the first half of 2026, 2,388 units were delivered, constituting a 40% advance and positioning the brand in the 16th place among imported vehicles. BYD's goal is to achieve 10,000 orders for the Racco by the end of the year.
The main differentiator of the model lies in its range. The 300 versions use lithium iron phosphate batteries with a capacity of 35.8 kWh and can travel 320 km in the WLTC cycle, making it the first electric kei car to exceed the 300 km mark. The entry-level version has a 22.4 kWh battery, offering a range of 210 km. Comparatively, the Nissan Sakura, the best-selling electric car in Japan, starts at 2,448,600 yen and reaches 180 km. Additionally, the Racco supports fast charging of up to 100 kW and is equipped with electric sliding doors, ADAS systems, and an NFC key integrated with the mobile phone.
However, there is an impediment related to government incentives. While electric vehicles manufactured by Japanese brands have access to subsidies of up to 580,000 yen, imports like the Racco qualify only for the basic benefit of 150,000 yen. Although the car has the lowest environmental rating in the segment, it does not have the lowest final cost.
K2 Space has successfully raised $500 million in a Series D round, increasing its market valuation to $6.8 billion. This valuation is more than double the company's worth after the Series C round, which took place in December.
Co-founder and CEO Karan Kundur, along with his brother Neil, founded K2 Space four years ago. Their core idea was that future space missions would focus on larger satellites rather than smaller platforms.
The company's theoretical assumptions have been practically confirmed: K2 Space launched the Gravitas satellite, which is already operating with a 20-kilowatt Hall thruster in orbit, demonstrating high power. This serves as proof that heavier satellites can perform communication and defense missions inaccessible to smaller platforms.
To support this potential, the company established its own manufacturing base early on. The K2 factory in Torrance spans 180,000 square feet and is capable of producing up to 100 satellites annually. Over 85% of each satellite platform's components are manufactured at this facility, which investors view as a key factor allowing the company to scale production from a few to hundreds of units without facing production bottlenecks that slow down competitors.
A significant step was securing contracts. The Space Force selected K2 as a supplier of satellite bus for its Protected Tactical Satcom-Global program, marking the company's first contract with the Pentagon. Additionally, commercial satellite operator SES requested an initial batch of 30 satellites for its meoSphere network, and defense contractor Anduril signed an agreement to manufacture satellites for the Golden Dome missile defense program.
According to K2, the company has secured commercial and government contracts valued at over $1 billion. The next mission is scheduled for the second quarter of 2027, when a series of satellites will be launched, and a large 100-kilowatt 'Gigabit' class satellite is planned for the second half of 2028.
Investors supporting K2 view this round as a bet on infrastructure. Lucas Oliveira, Senior Partner at Kleiner Perkins, noted that 'every important mission in space comes down to power and mass, and K2 understood that before anyone else.' Tengbo Li, General Partner at ICONIQ, stated more broadly: 'We believe space will become one of the defining frontiers of the coming century, and K2 is creating the platform to power the next generation of the space economy.'
OpenAI announced on Thursday, the 30th, a significant decrease in the costs of its smaller and mid-sized artificial intelligence models. This measure aims to make the use of these technologies more viable for companies amid growing concerns about AI-related expenses.
The company, known for developing ChatGPT, implemented an 80% cut in the cost of the GPT 5.6 Luna model and reduced the price of the mid-tier Terra model by 20%. This change comes in an increasingly competitive market, where there are disputes with other companies and the emergence of lower-cost Chinese alternatives.
The new pricing structure primarily affects the cost charged for data processing in OpenAI's smaller models. Specifically, the Luna model is now priced at 20 cents per million input tokens, compared to the previous value of US$ 1. The Terra model saw its price drop from US$ 2.50 to US$ 2 per million input tokens.
Regarding response generation, the Luna's cost was reduced from US$ 6 to US$ 1.20 per million tokens, while the Terra was adjusted from US$ 15 to US$ 12. The price of the company's main model, named Sol, remained unchanged.
This reduction occurs during a period when many corporations are finding it challenging to estimate the financial impact of intensive AI use. The sector has shown a trend of transitioning from fixed subscription plans to usage-based billing systems, which can generate instability and increases in operational costs.
OpenAI attributes this possibility of price drops to efficiency advancements integrated into GPT 5.6, citing improvements in both code development and internal system performance optimization.
The pricing strategy also exerts pressure on competitors. Anthropic, which has a strong user base among developers and companies with its Claude line, maintains higher prices on the mid-tier model equivalent to Terra. Data shows that Claude Sonnet 4.6 costs US$ 3 per million input tokens and US$ 15 per million output tokens, values higher than those currently practiced by Terra.
Furthermore, the market dispute is intense with the growth of open-source models developed by Chinese competitors, such as GLM 5.2, linked to Z.ai, which is pointed out as an option capable of approaching the performance of major Western companies at a lower cost.
Analysts observe that the price decrease may encourage more organizations to adopt artificial intelligence tools. However, this movement may also exert financial pressure on companies in the sector before any potential public stock offerings.
