South Africa’s new and pre-owned car market will continue to be constrained in supply due to multiple factors, says Mark Dommisse, chairperson of the National Automobile Dealers’ Association (NADA).<\/p>\n
Commenting on the October vehicle sales data for South Africa, Dommisse said that a shortage of pre-owned cars in specific segments means many consumers are not willing to trade in their existing cars until their preferred new car becomes available.<\/p>\n
Many motorists are also not driving as much as before the pandemic and holding on to their cars longer. This is also impacting the pre-owned market, he said.<\/p>\n
“We have seen a few soft spots in the pre-owned market, predominantly at the lower end, that aren’t seeing the uptake we would normally expect. However, the middle and upper end of the market is still thriving as pricing to their new vehicle counterparts offers excellent value.<\/p>\n
“A lack of de-fleeting by rental companies, however, will create more pressure on the supply of used cars on the lower end.”<\/p>\n
Dommisse said that an international shortage of microchips is also resulting in vehicle production forecasts for 2021 being uncertain and under pressure.<\/p>\n
“This is disconcerting, considering the local industry will have its annual three-week shutdown next month. The chip shortage is hitting all segments of the market; however, with vehicles that use fewer chips, there is still some availability of stock,” he said.<\/p>\n
He added that motorists would be hit hard by a hefty fuel price hike, directly and indirectly impacting the economy.<\/p>\n
“Everything we use and consume is transported, which will have the effect of inflationary pressure while oil prices are very high, leaving less cash in the bank for already cash-strapped consumers. In addition, it is difficult to predict what is in store for us when Enoch Godongwana, the newly-appointed minister of finance, makes his first budget speech next week.”<\/p>\n
There is some good news, Dommisse said.\u00a0<\/em>The welcome arrival of overseas visitors, which will boost the car rental business that has already begun, is a positive sign that the economy is opening up. He said that sales to the rental industry made up 14% of the overall sales figure, which is very encouraging.<\/p>\n Driving up prices in South Africa’s second-hand market<\/strong><\/p>\n New data published by online portal Cars.co.za and car pricing group GetWorth meanwhile, shows which brands and vehicles are seeing price increases in the used car market.<\/p>\n In the four years leading up to the first Covid-related lockdown, all used car price categories displayed steady price drops, said GetWorth.<\/p>\n Since the first lockdown, however, and particularly since around August 2020, that downward trend has reversed and prices have risen in all value bands, though not by the same margin across the board, the group said.<\/p>\n “More recently, prices have started to stabilise, particularly in the very important R200,000 and R300,000 bracket,” said colin Morgan, chief financial officer of GetWorth.<\/p>\n “There remains, however, some upwards momentum in the R400,000 to R600,000 price bands, while the top end has dropped in recent months. Interestingly, cars priced below R100,000 have not risen to the same extent, but this segment does tend to fluctuate more.”<\/p>\n Which brands are still seeing price growth?<\/strong><\/p>\n Bakkies are really important within the price-growth context, said Cars.co.za\u2019s consumer experience manager Hannes Oosthuizen.<\/p>\n He noted that the Toyota Hilux<\/strong>, Ford Ranger<\/strong> and Isuzu D-Max\/KB<\/strong> are consistently achieving Top 10 positions based on vehicle requests on Cars.co.za, and the demand for these vehicles is fuelling further growth.<\/p>\n “The most recent data shows that prices for Toyota and Isuzu, in particular, have continued to rise, but that Ford is starting to stabilise. Indeed, Single-Cab and Double-Cab bakkies have both shown strong price growth since the first Lockdown, but while Single-Cabs are still edging upwards, Double-Cabs have started to flatten off,” said Morgan.<\/p>\n He added that brands like Kia<\/strong>, Renault<\/strong> and Hyundai<\/strong> are edging closer to pre-Lockdown levels, while Volkswagen<\/strong>, Mercedes<\/strong>–Benz<\/strong> and Nissan<\/strong> are showing stronger growth relative to 2019.<\/p>\n Reflecting the general trend away from sedan vehicles, this body type has shown the lowest increases and actually still sits below 2019 levels. The vehicle types that most sedan buyers are shifting towards \u23bc SUVs and crossovers\u00a0\u23bc are showing slight promise of growth.<\/p>\n The top 10 most-requested cars on Cars.co.za during October 2021 were:<\/p>\n\n
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