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We take a look at the latest motor trade sales numbers as published by Statistics South Africa and focus on the total sales per month in both new and used vehicles. Has the South African consumer decided to buy more used vehicles instead of new vehicles? We take a look below.
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New vs Used Vehicles, which one comes out on top?
So we all know there are a few things better than getting into a brand new car and one can still smell it is new and driving it off the showroom floor. But with a struggling economy, poor job creation numbers, relatively high inflation numbers, modest salary increases, increasing taxes, are South Africans still keen on buying new cars? Or are they opting to buy used vehicles, which is considerably cheaper to buy, even if used vehicles have very low mileage on them. The line chart below shows the total value spent on new and used cars and the ratio of new vehicles over used vehicles (on the right hand axis).
The ratio of New/Used cars has come down significantly from the levels it reached in early 2013, where almost double the amount of money that was spent on used cars were spent on new cars. That ratio is currently sitting at R139 spent on new cars for every R100 spent on used cars. Since 2016 there has been a significant decline in the ratio as more and more people opt to buy used instead of new vehicles. And this has benefited the consumer greatly as new car dealerships started offering massive discounts on new vehicles and incredible finance options with rates being offered by certain brands of well below the price interest rate levels. As stock new stock struggles to move, these deals are implemented in the hopes of enticing clients to buy new instead of used vehicles.
The overall motor trade industry has been struggling for years, as the chart above shows the values spent on new and used vehicles have not grown significantly over the last 7 odd years. And these sales values include inflation, so once inflation is stripped out sales values have actually been in steady decline over the last number of years.
But the amount of money still spent each month on buying new and used vehicles averaged the following per month during 2018:
So on average people spend R14.11 billion new vehicles each month in South Africa and R10.25 billion on used vehicles each month. The total amount of money spent per month then in buying vehicles (both new and used) works out to R24.36 billion a month (or R422 per person living in South Africa per month).
The overall motor trade industry has been struggling for years, as the chart above shows the values spent on new and used vehicles have not grown significantly over the last 7 odd years. And these sales values include inflation, so once inflation is stripped out sales values have actually been in steady decline over the last number of years.
But the amount of money still spent each month on buying new and used vehicles averaged the following per month during 2018:
- New Vehicles: R14.11 billion
- Used Vehicles: R10.25 billion
So on average people spend R14.11 billion new vehicles each month in South Africa and R10.25 billion on used vehicles each month. The total amount of money spent per month then in buying vehicles (both new and used) works out to R24.36 billion a month (or R422 per person living in South Africa per month).