South Africa's governing African National Congress (ANC) looks to be facing its biggest electoral setback since the end of apartheid, after the partial results of municipal elections.
With 85% of the votes in, the ANC trails its main rival, the Democratic Alliance, in the cities of Port Elizabeth and Cape Town.
The two parties are in a close fight in Johannesburg and Pretoria.
But the ANC is still in the lead nationally.
Unemployment and corruption scandals surrounding President Jacob Zuma have tarnished the ANC's image.
"The ANC failed to enthuse their voters and give them a credible offer and that is what often happens to parties that have mismanaged the economy, mismanaged the city, but it also says that we are growing as a party," Democratic Alliance leader Mmusi Maimane told the BBC.
"We've been able to make an offer before South Africans that is compelling."
Mr Maimane earlier told 702 radio: "We call this the change election because we felt that it was a referendum on Jacob Zuma as a national figure, but we also had a referendum about the future of South Africa."
Final results are expected on Friday.
ANC's influence in decline: Milton Nkosi, BBC News, South Africa
The municipal election result is probably the biggest wake-up call the governing African National Congress has received since it ushered in democracy in South Africa in 1994.
Clearly the ANC still commands huge support across the country but that support is waning. It can no longer take it for granted that the black majority will blindly follow it.
Its power and influence is in decline.
In-fighting, public squabbles and a host of corruption scandals have been slowly eating away at the reputation of a once glorious movement of the people.
The best example is in the Nelson Mandela Bay municipality where the ANC is lagging behind in a city (Port Elizabeth) which has a rich history of anti-apartheid struggle. The man poised to be the new mayor is the Democratic Alliance's Athol Trollip, who is white.
Twenty-two years after the end of apartheid, black people are now voting on issues and not on race. Mr Trollip, who speaks fluent Xhosa, would not be where he is if the vast majority of black people had not voted for him.
The ANC has won more than 60% of the vote at every election since the end of apartheid more than two decades ago.
With two-thirds of the votes counted on Thursday, the ANC had 53%, followed by 28% for the Democratic Alliance and 7% for the radical Economic Freedom Fighters.
The local elections are being seen as an indication of the mid-term popularity of President Zuma. Correspondents say a poor ANC performance could embolden Mr Zuma's rivals within the party to challenge him.
The next general elections are due in 2019 but Mr Zuma cannot stand for a third term as president.
South Africa's economy has also been one of the main issues for voters, with growth expected to be zero this year, and unemployment standing at 27%.
Protests demanding better housing and amenities have sprung up across South Africa.
Mr Zuma has also had to weather a corruption scandal, after being ordered to repay taxpayers' money spent on his private home.
Security was tight for the elections and the electoral commission said voting had passed off smoothly.