Johannesburg – South Africa's Premium Car Market is undergoing historic transformation as a scale-back dealer for Audi, BMW and Volvo. I will raise a question.
The move reflects a global push towards consumer (DTC) sales.
In the US, Volkswagen's Scout Motors will bypass dealers completely when electric vehicles (EVs) are launched in 2027, causing a backlash from traditional retailers like Mark White.
According to a Bloomberg report, second-generation car dealer White faced a denial when he proposed building a $10 million showroom in South Carolina, USA, to sell Volkswagen's new EV line.
Wanting to be one of the vehicle's first retailers, White has discovered plans to completely bypass traditional dealers for the Scout Motor brand to sell directly to consumers when the electric pickup and SUV were launched in 2027.
Now fighting back, White has testified to legislators that this direct sales model threatens the livelihoods of 150 employees.
Legacy carmakers like Honda have also tested online bookings for EVs, with CEO Yamaguchi Shugo calling the process “Breeze.”
SA Reduced Premium Dealer
BMW has reduced SA dealers from 55 (2015) to 46 (2024). Volvo cuts the network from just 7 to just 7, citing electrification and digitization. Audi has denounced economic pressures for its restructuring – high inflation, interest rates and the weakness of the Rand. Recent reports show that German luxury cars (BMW, Audi and Mercedes-Benz) are scarce in small South African towns, except for the mining community with high disposable income. Verification via BMW South Africa's dealer locator and Mercedes-Benz SA's network map has confirmed a decline in rural dealers, with mostly focusing on major cities, mining hubs and mining hubs such as Emmarafreni. In 2014, Mercedes-Benz achieved strong sales in South Africa, moving 28,993 units. However, by 2024, sales had fallen sharply by 82%, with only 5,048 units being sold. Audi saw a similar recession and fell 70%, but in the BMW and Mini combined, sales fell by 50% over the same period.
Do South Africans buy cars online?
Globally, online car sales are booming:
However, the challenges remain.
Dealers are protected by franchise laws in many markets, and some buyers still prefer test drives.
However, as 95% of car shoppers survey online, brands may have no choice but to adapt.
Future: Virtual showrooms and China's competition
As Chinese brands like Haval and Chery expand in small towns in South Africa, premium automakers can use online sales to reduce costs and compete.
Physical dealers can quickly focus on second-hand cars and Chinese brands, while new premium models will be sold in virtual showrooms and from-home delivery.
What about mass market players?
VW, Ford and Toyota dominate sales in South Africa, but they rely heavily on dealers. If premium brands are successful online, can they follow?
One thing is that the way South Africans buy cars is changing rapidly.
*This article was first published in our sister publication techfinancials.co.za
