Toyota has repositioned the all-new RAV4 as a more premium offering in South Africa, a move that reflects the growing influence of Chinese automakers in the local market.
The company admits it can no longer compete on price at the entry level, where Chinese brands have reshaped customer expectations.
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Chinese cars now account for more than 19 percent of new passenger and light commercial vehicle sales in the country, and that share is expected to grow.
Why Toyota Shifted the RAV4 Upmarket
In a recent interview, Toyota South Africa Motors' senior public relations manager, Riaan Esterhuysen, explained the strategic shift.
“We cannot compete with the emerging Chinese brands directly on an entry-level price point,” he told Biz Community.
“They have changed that market; they have shaped the market or changed the shape of the market by driving customers down to a lower and mid-tier of the segment or taking used car buyers and upselling them.”
This is one of the first public acknowledgments by Toyota of how significantly brands like BYD, Chery, and Geely have forced it to adapt.
The new RAV4 starts at 770,500 rand ($47,100) and tops out at 1,043,900 rand ($63,800), roughly $3,500 more than its predecessor.
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While this push upmarket may reduce sales volume, it could allow Toyota to generate higher profits per vehicle.
Chinese vehicles have flooded South African roads in recent years, and the influx shows no signs of slowing.
More brands are entering the market, and established players are expanding their lineups, further intensifying competition.
Unless Toyota can speed up development and cut costs, its biggest Chinese rival, BYD, poses a significant threat.
In June, BYD chairman Wang Chuanfu claimed that within five years, BYD would overtake Toyota.
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Last year, BYD sold 4.6 million vehicles, while the Toyota group—including Lexus and Daihatsu—sold 11.21 million, making that goal ambitious.
