{"id":332027,"date":"2019-07-30T10:13:30","date_gmt":"2019-07-30T08:13:30","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=332027"},"modified":"2019-07-30T10:13:30","modified_gmt":"2019-07-30T08:13:30","slug":"south-africans-ditch-demo-cars-for-older-models-priced-under-r200000","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/motoring\/332027\/south-africans-ditch-demo-cars-for-older-models-priced-under-r200000\/","title":{"rendered":"South Africans ditch demo cars for older models priced under R200,000"},"content":{"rendered":"

The South African car market continues to struggle, with the bulk of the buying activity currently taking place in the used car sector as financially stretched consumers increasingly opt for older cars at lower price points.<\/p>\n

This is according to the latest TransUnion SA Vehicle Pricing Index (VPI) for Q2 2019.<\/p>\n

The number of new and used vehicles financed have fallen 7% and 2% quarter on quarter respectively, according to the TransUnion VPI report. The drop in sales is in spite of the VPI for new and used vehicle pricing remaining below inflation, with used vehicle pricing increases at their lowest since Q2 2014.<\/p>\n

The new vehicle VPI moved to 3.1% in Q2 2019 from 2.6% in Q1, while the used vehicle index fell sharply from 2.5% to 1%. The index measures the relationship between the increase in vehicle pricing for new and used vehicles from a basket of passenger vehicles, which incorporates fifteen top volume manufacturers.<\/p>\n

Vehicle sales data is collated from across the industry to create the index.<\/p>\n

\u201cThere is a direct correlation between current macro-economic conditions \u2013 the country\u2019s negative GDP growth of 3.2% for Q1 is the lowest it\u2019s been in the past 10 years \u2013 and the constrained new vehicle market,\u201d said Kriben Reddy, head of Auto for TransUnion Africa.<\/p>\n

\u201cOverall, the South African car market had another challenging quarter, although petrol price decreases forecasted in July should excite consumers\u2019 pockets. The signs for new vehicle sales are looking stagnant going into the second half of the year as dealers push sales through guaranteed buy-back options and marketing initiatives to suit the consumers\u2019 pocket,\u201d said Reddy.<\/p>\n

\u201cWhat this means is that consumers are in a position of power when purchasing new or used vehicles, with price increases well below inflation for the past two years as manufacturers try to stimulate the market through bargains and discounts.\u201d<\/p>\n

The TransUnion VPI report shows the used-to-new vehicle ratio increased from 2.05 in 2018 Q2 to 2.16 in 2019 Q2, which means that 2.16 used vehicles were financed for every new vehicle financed.<\/p>\n

The make-up of used vehicle sales is also shifting, with 34% of used vehicles financed under two years old, with 6% of those being ex-demo models \u2013 which indicates consumers are opting for older vehicles as pressure on disposable income increases.<\/p>\n

\"\"<\/a><\/p>\n

People continue to spend less on cars, with a clear shift back to vehicles under R200,000 as consumers continue to feel strain on their disposable income. The percentage of cars (both new and used) being financed below R200,000 is at levels last seen in Q2 2013, which effectively means that consumers\u2019 purchasing power has not changed since that time and has actually decreased in real terms.<\/p>\n

\u201cWhile we anticipate car sales will remain under pressure for the rest of the year, we\u2019re cautiously optimistic about 2020. Although the Q1 2019 GDP fell sharply, our expectations are that we will see a slight improvement in Q2 and Q3, which should positively impact the car market,\u201d said Reddy.<\/p>\n

\n

Read: Here\u2019s how much the average South African owes on their car, house and store accounts<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

The South African car market continues to struggle, with the bulk of the buying activity currently taking place in the used car sector as financially stretched consumers increasingly opt for older cars at lower price points.<\/p>\n","protected":false},"author":10,"featured_media":332083,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11119],"tags":[26,11687],"class_list":["post-332027","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-motoring","tag-headline","tag-transunion"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/332027","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=332027"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/332027\/revisions"}],"predecessor-version":[{"id":332093,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/332027\/revisions\/332093"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/332083"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=332027"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=332027"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=332027"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}