The demand for personal vehicles is likely to increase as long as inner-city accommodation is scarce or too expensive, commuting distances are long, and public transportation is unreliable or lacks integration.
Image: Nigel Sibanda
Living far from the places of work, study and opportunity amplifies the need to own a car.
The data from the Quarter 4 2025 Mobility Insights Report strongly supports the idea that structural factors, including geography, amplify the need for personal mobility, says Ayesha Hatea, the senior director of Research and Consulting at TransUnion Africa.
The report by the commercial, consumer, insurance and auto risk information solutions provider for several industries shows that new passenger vehicle sales grew by a whopping 20.1% year‑on‑year last year, reaching 422 103 units, with the year's last quarter alone delivering 114 246 vehicles, the strongest quarter in the post‑pandemic era.
Hatea says this is more than a cyclical recovery, as it reflects a systemic pull toward mobility as a necessity rather than a luxury.
Hatea says while the report does not explicitly attribute vehicle demand to spatial inequality, South Africa’s well‑documented pattern of people living far from economic hubs intersects directly with the report’s evidence of:
Combined, she says, these factors suggest that mobility needs, shaped by geography, remain a key vehicle demand driver.
Limited access to affordable housing near city centres effectively hardwires transportation needs into household economics, says TransUnion Africa.
The insights provider adds that the Q4 report shows consumers placing far greater weight on value and long‑term ownership costs when buying vehicles. This behaviour is consistent with a population that must travel, not one that chooses to, it says.
As long as city‑centre housing remains scarce or unaffordable, commuting distances remain long, and public transport remains insufficiently reliable or integrated, the need for personal vehicles is likely to intensify, Hatea says.
Vehicles often attract middle‑income consumers living furthest from work opportunities.
Moreover, she says the report highlights the rise of value brands, particularly Chinese OEMs (original equipment manufacturers), whose feature‑rich yet affordable models have expanded to more than 17% of the market.
“These vehicles often attract middle‑income consumers who live furthest from work opportunities and therefore need dependable personal mobility. Thus, continued housing constraints near economic zones will likely sustain or increase reliance on personal vehicles going forward.”
Affordable housing supply near economic nodes could create moderation in the need-driven portion of vehicle demand.
The senior director says if South Africa were to materially resolve its spatial-access issues in metropolitan, urban, township and semi-rural areas through better housing supply near economic nodes or through improved affordability, it is reasonable to expect some moderation in the need-driven portion of vehicle demand.
From the report, she says that they know that:
If housing access near places of opportunity were improved, TransUnionAfrica says:
However, she maintains that car sales would not collapse as personal mobility holds cultural, safety, and convenience value beyond just commuting.
Generally, it's vehicle finance before a home loan, clear evidence that South Africans enter the secured credit market through vehicle finance before a home loan.
TransUnion says its recent credit‑graduation work shows a clear pattern in SA of consumers stepping into secured credit through vehicle finance before they reach a home loan.
In the study on consumer credit‑graduation journeys, TransUnion says it found that as South Africans expand from single‑product to multi‑product wallets, the first move into “more complex” credit is most often via personal loans and vehicle finance, not home loans.
“That study followed 7.6 million consumers over four years and explicitly identified vehicle finance as a common early secured step on the path to a fuller credit wallet, with home loans appearing later for a smaller share of wallets once affordability and risk profiles have matured.”
Distance from work and the perceptions on the reliability of alternative means of transport may coerce middle-income households to turn to private transport, says Professor Peter Baur, an associate professor at the School of Economics of the University of Johannesburg (UJ).
“But ongoing affordability and the potential of increasing costs of credit may swing the pendulum back again, particularly through the gravity of increasing uncertainty,” Baur says.
He says that a cautionary note is that household debt to income is also on the uptick, indicating additional strain on households to fund such debt.
“Yet, this increase in car sales may not accurately reflect the impact of Iran on oil prices, and the potential increase in fuel prices, which are already becoming apparent.
"We may see a downturn in car sales soon, as the increased energy costs begin to apply inflationary pressures to the cost of living, such as on rising food prices and other commodities, which will put households under additional pressure.
“The adjustments in interest rates given the pending inflationary pressure will add additional pressure to household spending patterns, and this may also impact negatively on car sales going forward.”
Meanwhile, nearly 50% of South Africans are said to feel underpaid by their employers and are living paycheck to paycheck. Furthermore, women are still earning roughly 24% less than men, according to data from recruitment platform Job Crystal.
The platform says the data shows that many small businesses are still getting salaries wrong when hiring, estimating that around 80% of SMEs set salaries primarily based on their internal budgets rather than what the market actually pays.
As a result, it says there is a growing mismatch between what employers offer and what candidates expect, which ultimately slows hiring and makes it harder for businesses to compete for talent.
When employees feel underpaid or earn below market rates, it directly limits their ability to make long-term financial decisions such as buying property, securing stable housing, or financing a vehicle, says Sasha Knott, CEO of Job Crystal.
“These are often the biggest financial commitments people make, and when salaries don’t keep pace with the cost of living, employees are forced to prioritise basic monthly expenses instead.
"In South Africa, we are increasingly seeing professionals living pay cheque to pay cheque, which means that saving for deposits on homes or qualifying for vehicle finance becomes far more difficult. Underpayment, therefore, affects people’s ability to build financial stability and improve their quality of life.”
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