The financial well-being of a whopping 65% of vehicle-buying consumers in South Africa has been negatively impacted by the nationwide lockdown. Many (30% to be precise) are under pressure to replace their vehicle within the next four weeks.
This is compelling evidence in favour of allowing all vehicle dealerships – both independent and franchised – to trade under Level Four of lockdown restrictions.
Things have changed
According to George Mienie, CEO of AutoTrader, who points out that, as consumers lose their jobs and/or receive salary cuts, they are demonstrating an urgent need to free up cash or reduce monthly household costs.
“Searches for second-hand vehicles under R50 000 have increased by almost 300% versus normal pre-lockdown levels. he reveals. Clearly, South Africans are worried about how they will feed their families,” he says.
Motorists are trading down from a BMW X5 50D (R730 000) to a BMW 520d (R500 000). They are trading down from a Mercedes-Benz ML63 (R670 000) to a Mercedes-Benz C180 (R300 000). And they are trading down from a Ford Ranger (R335 000) to a Nissan NP200 (R160 000).
“We have established that 30% of consumers indicate that they are under pressure to replace their vehicle within the next four weeks. This pipeline needs to be managed to avoid a further financial impact on both consumers and car dealers.”
“The sooner consumers are allowed to trade with vehicle dealerships, the sooner their family’s financial pressures may be eased. Enquiries to vehicle dealerships have increased by more than 150% compared to pre-lockdown levels,” Mienie notes.
Mienie says that it is in the best interests of the SA consumer that all vehicle dealerships be allowed to trade under Level 4 and that ‘specific directions’ be communicated by government as a matter of urgency so that dealerships are allowed to open their doors.
Mienie notes that all the supporting infrastructure needs to operate too like licence departments, testing stations and roadworthy centres.