Report: Optimism for 2023 high among SA’s car dealerships

South Africa’s chain of car dealerships have reportedly expressed careful optimism that the local industry will continue to flourish in 2023.

With it being reported last month that the price of used vehicles have started decreasing to levels last seen before the pandemic, along with new vehicle sales remaining buoyant after 13 months, emerging markets have seemingly offset the downwards trend currently playing out in Europe.

Smart will benefit

According to the chief marketing officer of small business development funding firm Lulalend, Tom Stuart, the local industry, despite the ongoing effects of the energy crisis, rising living costs and sluggish economic growth, appears on-track to reap the benefits of the burgeoning commercial, industrial and technological segments.

“These economically turbulent times could bring a vibrant phase of growth and activity for the car dealership industry in South Africa,” Stuart said.

He further stated that the rise in new energy vehicle sales, consisting of hybrid and electric vehicles (EVs), will continue with hybrids being favoured above EVs in spite of both segments showing growth as availability intensifies.

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The same extends to subscription based vehicle sales and e-hailing services such as Bolt and Uber, with Stuart remarking that dealerships willing to adapt would be ones on-track to gain the most.

He adds that recent findings have revealed that dealership now make use of a hybrid online sales platform in order to apiece buyers keen on buying online instead of visiting a dealership in person.

Caution still advised

At the same time though, challenges will prevail throughout the year, the most prominent being supply-chain constraints as a result of the still severe global semi-conductor shortage and spendable consumer cash due to the escalating living costs.

“A reliable line of business credit will help you manage unexpected operating costs, like installing alternative energy systems, and let you stay a step ahead of shifting consumer trends,” Stuart advises.

“As SMEs, many car dealerships are also eligible for various forms of support from the government such as grants and tax break”.

In concluding, Stuart reiterates that dealerships should be on the lookout for government-back upskilling and entrepreneur training in order for them extract the maximum going forward.

For more information on Lulalend, click here.

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