Why you might be running out of time to buy a pre-owned car
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Johannesburg - The National Association of Automobile Manufacturers of South Africa (Naamsa) says that although new vehicle sales for May 2020 still reflects a substantial decline of 27 496 units (68%) from the 40 428 vehicles sold in May last year (compared to the 12 932 units sold in May 2020), this was a noteworthy improvement when compared with the April 2020 performance of the market.
"While we are under no illusion that the risk of infection remains possible as the number of new cases increases nationally and particularly across the hotspot areas, the automotive industry will stay vigilant during this time and maintain current protocols in ensuring the health and safety of all its employees who have returned to work," he says.
The industry body notes that new vehicle sales for May 2020 continue to reflect persistent demand weakness due to the impact of the Covid-19 pandemic as consumer and business sentiment remains severely depressed.
Are used car sales set to explode in South Africa?
While used car sales in South Africa during May 2020 mimicked new car sales and were understandably down compared to 2019 figures, consumers are demonstrating increasing interest in buying a pre-owned vehicle.
According to George Mienie, CEO of AutoTrader, more than 17 000 used cars were sold through the AutoTrader SA platform alone last month.
The noteworthy fact, however, is that a total of 37.7 million searches for used vehicles took place in May 2020 – versus 25.1 million in the same month last year - a whopping increase of 49.78%.
“We have to remember that trading resumed halfway through the month and that licensing departments remain closed – so the sales figures are quite encouraging given the circumstances,” points out AutoTrader CEO, George Mienie.
“The search results indicate pent-up demand, which is great for the economy and could indicate a returning to normal.”
The cumulative value of used car sales in 2020 shows a dramatic – but understandable – decline compared to 2019. A cumulative selling price of R4.8 billion was recorded in 2020 on a year-to-date basis – versus R10,2 million over the same period in 2019.
The Ford Ranger was once again the most sold used car in May 2020 – but the two other podium positions changed completely when compared to April 2020. The Kia Sportage and Jeep Wrangler (number two and three in April) were replaced by the Volkswagen Polo and Toyota Hilux. “This is interesting to see,” notes Mienie. “This indicates that the market is normalising. The Polo and Hilux are perennially popular.”
In a similar way, the vehicle in the number four spot in April – the Kia Picanto – was replaced by the Volkswagen Polo Vivo in May. “This is what we have come to expect from used car buyers. The Polo Vivo is always a top performer in the used car market.”
Mienie says that Gauteng was the most active province during May, accounting for a whopping 61% of the total used car market share in South Africa. The Ranger reigned supreme in this province, with over 10 000 sales last month.
You can check out some added info in the graphics below: