The motor dealer retail market in South Africa has stalled through the national lockdown.
The motor dealer retail market in South Africa has stalled through the national lockdown.

Motor dealer industry stalled in SA, thousands of jobs on the line

By Edward West Time of article published May 5, 2020

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CAPE TOWN -  The motor dealer retail market in South Africa has stalled through the national lockdown, putting thousands of jobs at risk, but digital solutions can give this market a boost, DealerSA founder, David Thomas said yesterday.

According to the National Automobile .Dealers’ Association (Nada), there are about 1 600 franchise vehicle dealers in South Africa, employing 60 000 people directly, and nearly one million in the automotive value chain with the multiplier effect.

Franchise dealers’ collective investment is worth more than R40 billion, which accounts for 2.5 percent of the motor industry’s 6.9 percent contribution to gross domestic product.

“Motor dealers are an essential part of the automotive value chain, and longer a restrictive lockdown continues, the higher the number of dealers that will need to close shop. Digital solutions that enable car purchases while avoiding human contact is one area that will give this market a much-needed boost.” Thomas said.

Lockdown Level 4 regulations gazetted last week allow for car sales to be phased in, under directions still to be announced.

DealerSA is an online auction platform that has been designed specifically for the South African dealer-network.

Many dealerships are in dire straits and are going to battle to stay solvent in the coming months. Thomas said in these times, technology-based companies should adjust their offering and provide solutions that help businesses survive the impact of Covid-19.

Pre-owned vehicle sales were providing a glimmer of hope.

While new-vehicle sales in SA plunged 29.7 percent last month versus March 2019 as a result of Covid-19, used-vehicle sales increased.

Pre-owned vehicle sales on the AutoTrader website – one of country’s leading online motoring marketplaces – rose from about 30 000 units in March 2019 to more than 33 000 in March 2020.

DealerSA is an independent online vehicle auction platform that claims it can dramatically reduce the costs incurred by both vehicle buyers and sellers.

“Our platform delivers fresh quality stock daily so that dealers can meet the current demand. Our buying process is transparent, and our independence allows us to offer a simplified pricing model that makes the platform cost-effective,” said Thomas.

A bid history was provided to winning bidders. The platform screens users before granting access, verifying they are registered dealers.

The only cost is a once-off administration fee of R500 on all successful sales, which the seller pays.

In the last three months; Volkswagen South Africa, The Tavcor Motor Group, The Omni Car Group and more than 300 independent dealers had joined the DealerSA network.

BUSINESS REPORT 

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