South Africa Car Sales For May Shows Legacy Auto Brands Back In The Game
The South African car market is so small compared to other countries around the world so any decline is rather noticeable. The likes of Isuzu who have been on a decline for months at least have bounced back and stopped the market share slide.
This is something I have been keeping an eye on for a while now as I would like to see the legacy auto brands fight for their market share. The cheaper Chinese imports have been eating away at this sector for a few years now and it is noticeable how many of these Chinese brands are on the road today. I am no fan of Chinese products and would rather pay a little extra to avoid them wherever possible. Maybe that is just me, but I have dealt with Chinese manufacturers for the last 20 years and let us just say I have little to no trust in what they produce.
The good news from all of this upheaval and turmoil is the consumer will benefit as the legacy brands have to offer more of a deal if they are going to stay in business. Just this week I saw Nisan offering a 7 year warranty plan and a 6 year 90 000 KM service plan which is more in line with what the Chinese brands have been offering. If they want to be competitive they need to fight back offering a similar package deal or they are going to go out of business.
BYD the Chinese automaker has 13 dealerships currently and has an aggressive growth plan with a target of 35 dealerships by the end of next year. That is roughly 1.3 new dealerships added each month with the aim of taking FORD head on with their sights set on the Ford ranger. I suspect Ford will be pivoting and offering something similar to what Nissan has done and this should plug the holes for the time being. For the like of Ford and Nissan this is not about growth, but holding and keeping the market share they have.
Thee economy has not improved and the unemployed figures are still rising month on month so the new car sales figures are not going to keep on growing and will stabilize. Looking at the repossessions is where I am currently looking for my next car the numbers are increasing by roughly 4% per annum with roughly R4 billion repossessed vehicles annually.
Why buy a new car when you can get a low mileage car with a service and warranty plan for 60% of the book value. If you buy smart the amount you pay today you will receive when you sell in three years time. I have done this before and is the only way I buy a vehicle now as buying anew vehicle makes no financial sense. Maybe I will do a post on this and give some examples which will also make me attend the auctions.
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I'm surprise BYD is not in the top 10.
Funny thing, Ford sold last month 208,274 vehicles in USA, which is almost as much as all of these that you have on your list combined...
The last two vehicles I bought in US were actually brand new leased cars. BMW X5 in 2018 which we still drive and will probably keep for another 10 years and Toyota RAV 4 a few years later which I sold half a year before the lease was up. Those were the times when the interest rate they put into the lease was around 1% and I calculated that buying a brand new was cheaper than 3 year old off lease vehicle. And I did the full accounting and after driving for 2.5 years RAV 4 I was basically break even on that and I made money overall as when I sold it I had to report a $6,000 capital gain on my taxes... So yeah that was definitely a good deal.
Yes the SA market is small in comparison even though Ford has an assembly plant here which they supply locally and export to Europe. You definitely got a good deal and good to know you pay close attention to the figures. This is why I will buy a repossessed car with low Km/miles with service pan and warranty. Banks just want to offload them and they can be up to 40% cheaper than book value, but I tend to work on 60% as an average. I nearly bought an X5 a few years back that only had 6000Km on the clock and had not even had it's first service yet. That vehicle went for less than 40% of book value as at auctions the higher the prices the better the deals due to limited buyers in attendance with the funds. The cheap vehicles have loads of buyers haggling and as soon as you pass the $15K budget mark you could be the only one.