While used car sales in South Africa during May 2020 mimicked new car sales and were understandably down on 2019, consumers are demonstrating increasing interest in buying used vehicles, says AutoTrader chief executive officer, George Mienie.
Commenting on vehicle sales data for May, Wesbank said that financing applications volumes across new and used vehicles were between 65% and 70% of the levels experienced during May 2019.
“Trading conditions from May last year until February this year were reasonably consistent and representative of normal trading conditions before the country entered Alert Level 5 lockdown during March,” said Lebogang Gaoaketse, head of marketing and communication at WesBank.
“The industry’s ability to actually trade during May was also impacted by practical considerations of supporting administration as well as the actual appetite to conclude a deal in this environment.”
“WesBank data indicates an increase in demand for used cars in terms of vehicle applications, supported by a larger than usual increase in the deal size of those used car finance agreements. This supports some forecast analysis of a trend for consumers to buy down into the used car market in order to reduce the size of their car repayments and mobility budgets,” said Gaoaketse.
Over 17,000 used cars were sold on AutoTrader in May 2020 versus more than 36,000 in the same month a year ago, a decline of 52.11%, it said.
But the big news is the fact that a total of 37.7 million vehicle searches took place in May 2020 – versus 25.1 million in the same month last year. This is a substantial increase of 49.78%, it pointed out.
“We have to remember that trading resumed halfway through the month and that licensing departments remain closed – so the sales figures are quite encouraging given the circumstances,” said Mienie.
“The search results indicate pent-up demand, which is great for the economy and could indicate a returning to normal.”
The cumulative value of used car sales in 2020 shows a dramatic – but understandable – decline compared to 2019. A cumulative selling price of R4.8 billion was recorded in 2020 on a year-to-date basis – versus R10.2 million over the same period in 2019.
The Ford Ranger was once again the most sold used car in May 2020 – but the two other podium positions changed completely when compared to April 2020. The Kia Sportage and Jeep Wrangler (number two and three in April) were replaced by the Volkswagen Polo and Toyota Hilux, AutoTrader’s data showed.
“This indicates that the market is normalising. The Polo and Hilux are perennially popular,” said Mienie.
In a similar vein, the vehicle in the number four spot in April – the Kia Picanto – was replaced by the Volkswagen Polo Vivo in May. “This is what we have come to expect from used car buyers. The Polo Vivo is always a top performer in the used car market.”
Mienie said that that Gauteng was the most active province during May, accounting for a whopping 61% of the total used car market share in South Africa. The Ranger reigned supreme in this province, with over 10,000 sales last month.