Used car business attracts entrepreneurial South Africans to invest
JOHANNESBURG – As the Covid-19 pandemic continues to create uncertainty in life, more consumers are choosing to purchase pre-owned vehicles rather than new, to save money under a shaky economy, rising household expenses and unstable work environments.
Jason White, Joint Venture Head of InspectaCar Finance says: “We are excited to note, however, that we have seen a rise in interest from stakeholders looking to invest in an InspectaCar franchise. Over the past three months we have seen in excess of 110 enquiries come through to us, with more than 20 serious applicants who have initiated the process of enquiry into a franchise.
“It is interesting to note that there are seven interested parties who are currently operational in the retail dealer environment. This is hugely encouraging as these investors have in-depth knowledge of this unique industry.”
IDEAL TIME TO SELL USED VEHICLES IN SOUTH AFRICA
White explains that the business is seeing a mixture of existing InspectaCar dealers’ interest in increasing their offering in other regions, as well as new investors who wish to convert their independent used car dealership to a reputable brand.
“The biggest interest so far has come from entrepreneurs. This is attributable to stakeholders looking for new opportunities in the market, and the used car market is understandably the area to move into.”
InspectaCar is upbeat in its outlook on the pre-owned market in 2021. “We certainly anticipate the digital market evolving over the years, which will complement how consumers will transact into the future. While demand is currently higher than supply, we are hoping that this will improve in the coming months, turning this segment of the market around into a flourishing one for used car buyers,” White says.
USED VEHICLES SALES OPERATIONS THRIVING
According to Pertunia Sibanyoni, chief executive of InspectaCar, there were no InspectaCar franchise closures since lockdown last year. “We are fully committed to assisting and supporting our franchisees, through both good and difficult times.
“The pandemic and resultant financial pressures meant that we as a franchisor needed to think creatively as to how we were going to support our valued partners.”
“The first decision we made when lockdown came in to effect, was to waiver franchise fees for a certain period of time. We actively provided our franchises with ongoing critical information in order to keep their businesses going, including financial relief packages, as well as specific documentation and advisories on how to operate safely in lockdown level 4 and onwards, with all stakeholders including employees, suppliers and customers.
“Vehicle dealerships are resilient, having faced numerous financial meltdowns in the past. It soon became obvious that if they made it through the global financial crisis in 2008/2009, nothing would stop them.
“Sheer determination saw dealers constantly adjusting and applying the necessary changes to business plans and new ways of operating, as the pandemic continued and the economy and resultant consumer buying needs adjusted.”
REPUTABLE USED VEHICLE DEALERSHIPS RISE IN POPULARITY
InspectaCar franchisees, with the exception of two dealerships that parted ways amicably with the franchise, and the new dealerships that opened their doors in the past four years, have been with InspectaCar from its inception in 2002, or have owned InspectaCar franchises for more than 10 years.
“It is encouraging to see that they have embraced the revitalised InspectaCar strategy, that has set them apart, specifically as being the only used car franchise certified by WesBank.
“They have also enjoyed access to the unique InspectaCar one-stop-shop benefits coupled to the brand credibility of being backed by a financial services industry giant, that other independent pre-owned dealers don’t have access to,” says the InspectaCar chief executive.
“In the face of this challenging operating environment, it is heartening to see a renewed interest in pre-owned franchise ownership. New investors are pegging their stakes in the ground and are actively making preparations to open their doors to business.”