Three prominent luxury car manufacturers — Audi, BMW, and Volvo — are downsizing their dealership networks in South Africa as they grapple with a shrinking premium vehicle market and evolving consumer preferences.
Audi’s Strategic Realignment
In April 2025, Audi confirmed it would be overhauling its dealership footprint across South Africa. This decision comes in response to a series of mounting challenges in the premium automotive sector, which the brand says has come under increasing pressure in recent years.
Among the primary factors driving the restructuring are high inflation, soaring interest rates, and a weakened rand, which have all fueled a widespread “buying-down” trend. Audi noted that these economic conditions have eroded consumer affordability and intensified pricing pressure on automakers. Consequently, many South Africans have begun opting for more affordable vehicles from newer entrants targeting budget-conscious buyers.
Compounding these economic headwinds is the lack of government support and policy clarity regarding electric vehicles (EVs). Audi pointed out that South Africa lags behind other countries in offering incentives for battery electric vehicles (BEVs), which could otherwise help stimulate the premium segment’s recovery.
The data supports Audi’s concerns. According to Lightstone Auto, premium vehicle sales have plummeted by 68% over the past decade, dropping from 74,015 in 2014 to just 23,881 in 2024. In response, Audi has launched what it terms an “optimised footprint strategy.” While the company has not disclosed the total number of closures, the Motor Industry Staff Association (MISA) reports that at least four dealerships are set to shut down in the near future.
Despite the changes, Audi emphasized its continued commitment to South Africa, pledging to adapt to the evolving landscape while maintaining premium customer service.
BMW Adjusts to Market Realities
BMW has also been gradually scaling back its South African dealership presence. From a high of 55 dealerships in 2015, the brand had reduced its network to 46 by the end of 2024 — a 16% decrease over nine years.
A BMW spokesperson cited several contributing factors, including tough economic conditions, a shift to service-only branches, and consolidation efforts aimed at improving operational efficiency. However, the most significant driver appears to be the escalating cost of premium vehicles, which has pushed many consumers toward more affordable alternatives.
Currency depreciation has played a pivotal role. BMW pointed out that the rand weakened considerably from around R10.20 to the US dollar in 2013 to R18.26 by 2024. This forced all vehicle manufacturers to hike prices well above standard inflation and production cost increases, ultimately reshaping the premium market.
Volvo’s Electrification-Driven Shift
Volvo Cars South Africa (VCSA) is implementing the most dramatic change among the three. The automaker plans to slash its dealership network from 19 to just seven as part of a broader shift toward digitalisation, sustainability, and electrification.
VCSA has identified four dealer groups — CMH, SMH Bedfordview, Tom Campher Motors, and Rola Motors Somerset West — that will operate its vehicles across seven strategic locations in Gauteng, KwaZulu-Natal, and the Western Cape. The decision followed a year-long nationwide review in 2024 that evaluated dealership performance and market potential.
Volvo confirmed that the restructuring would be finalised by the end of the second quarter of 2025. Affected dealerships are currently working with the manufacturer to determine closure timelines, and customers will be notified accordingly.
Dealership Closures and Restructuring
| Brand | Dealerships (Before) | Dealerships (After) | Reason for Change | Key Strategy | Other Notes |
|---|---|---|---|---|---|
| Audi | Undisclosed | At least 4 to close | Shrinking premium market, buying-down trend, lack of EV incentives | “Optimised footprint strategy” | Sales down 68% over the past decade |
| BMW | 55 (in 2015) | 46 (in 2024) | Currency devaluation, affordability, operational efficiency | Service-only branches, consolidation | Rand dropped from R10.20 to R18.26 per USD |
| Volvo | 19 | 7 | Focus on electrification, digitalisation, and sustainability | Strategic placement of dealers | Full restructure by Q2 2025 |
The withdrawal and restructuring of Audi, BMW, and Volvo dealerships highlight the growing difficulties faced by the premium vehicle segment in South Africa. Economic volatility, shifting consumer preferences, and a lack of supportive government policy have all contributed to a challenging business environment for luxury automakers. These companies are now recalibrating their operations to stay competitive — focusing on efficiency, digital transformation, and electric mobility to meet the demands of a changing market.
Related article: BMW Accelerates to the Top in South Africa
