A look at new and used car sales in these unprecedented times
According to WesBank, South Africa’s 2021 new vehicle sales will show "double digit growth off 2020’s unforeseen low base, but will also continue to show a decline in real economic terms".
WesBank CEO Chris de Kock said, “Two distinct considerations need to be separated in understanding what the new vehicle market may do this year: what sales are expected to do compared to 2020, which will provide a skewed representation of market activity; and how the market will effectively perform in a normalised economic outlook, which will provide a more accurate depiction of activity.
“It is not difficult to imagine that the market will perform better than 2020, but the industry cannot find confidence in this theoretical growth at the risk of losing sight of the very real impacts the weak South African economic environment will continue to have on the South African motor industry.”
Chris de Kock.
WesBank predicts a continued worsening of new vehicle sales during 2021, but compared to 2020 sales it predicts a 12 percent growth.
Consumers will continue to buy down so as to reduce monthly payments and insurance costs. This has also resulted in strong growth within the preowned car market.
George Mienie, CEO of the largest digital automotive marketplace in South Africa, AutoTrader, described the used car market as being very buoyant.
“Online car searches for used cars grew by 54,1% year-on-year for the period July to December 2020. Furthermore, used car prices rose in the same period, which is unusual – historically, prices in the second half of the calendar year are lower. However, this increase in price is a result of increased consumer demand for used cars over new cars. The average used car prices rose to R312 794, representing an 8,5% increase, with the average mileage being 70 429km, representing a 4,7% decrease.”
