Affordable reliable cars are high on buyers agendas

Park Village Auctions

According to the National Association of Automobile Manufacturers of South Africa (NAAMSA) there was a significant drop in domestic new car sales in June. With the exception of light commercial vehicles, new car sales registered the largest year-to-date monthly decline of 4.8% in 2015. Sales of vehicles in the investment driven medium and heavy truck segments also registered significant declines.

Out of the total reported industry sales of 50 251 vehicles, an estimated 84.5% reportedly represented dealer sales, 6.4% represented sales to the vehicle rental industry, 5.9% constituted sales to government and 3.2% was snapped up by corporate fleets.

Notably, sales dropped despite second quarter incentive packages, a fact which NAAMSA attributes in part to “intense competition in an increasingly difficult trading environment which continues to put pressure on margins throughout the automotive value chain.”

The decrease in local new car sales was however offset by further strong growth in new vehicle exports. Indeed, vehicle exports for 2015 reportedly currently remain on track to improve in annual terms by about 25% to a record high of 330 000.

Positive though the export news may be, PVA’s Clive Lazarus expects local new car sales to remain under pressure for the short to medium term. Sluggish economic activity coupled with various other issues such as petrol price increases all make for a fairly bleak outlook on this front he says. Meanwhile, business on the auction front is ticking over nicely albeit reportedly largely in keeping with current sentiment.

Says Lazarus: “As things stand, affordability is the name of the game with many buyers looking for small to medium family hatchbacks. Mainstream, brand name cars which are reliable and cheap to maintain are also high on the agenda. In short, high price inflation on new cars and affordability concerns mean that more and more buyers are looking for value in the pre-owned space which is where we come in.”

That said, PVA continues to cater to buyers across the spectrum as the latest auction figures reveal.

On the 22nd of July, PVA achieved the following notable car auction prices:

•    Low: 2006 Hyundai Sonato (225 942km’s) R29 000
•    Middle: 2011 Mitsubishi Pajero Sport (86 700km’s) R129 000
•    High: 2012 Land Rover Evoque 2.0 (41 721m’s) R332 000