Buyers' advice, Motoring News, Vehicle sales

Buying down: Cash-strapped buyers desperate for dealers to open

JOHANNESBURG, South Africa – The financial well-being of a 65% of vehicle-buying people in South Africa has been hurt by the nationwide Covid lockdown with perhaps 30% under pressure to replace their vehicle within the next four weeks.

This is, The Corner was told, compelling evidence in favour of allowing all vehicle dealers – independent and franchised – to trade under Level 4, according to George Mienie, CEO of AutoTrader, because potential vehicle buyers have lost their job or had their salary cut so are demonstrating an urgent need for cash or lower monthly household costs.

He explained: “Searches for second-hand vehicles under R50 000 have almost trebled from pre-lockdown numbers. Clearly, people are are worried about how they will feed their familes.”

ABOUT THE PRICING…

The consequences: Vehicle owners trading down in all categories.

Anecdotal feedback, AutoTrader says, show people trading down from, say:

    • A BMW X5 50D (R730 000) to a BMW 520d (R500 000).
    • AMercedes-Benz ML63 (R670 000) to a Mercedes-Benz C180 (R300 000)
    • A Ford Ranger (R335 000) to a Nissan NP200 (R160 000)

The website ran a survey during the first week of May 2020 to try to establish lockdown buying patterns. Mienie again: “We’ve established that 30% of buyers are under pressure to replace their vehicle within the next four weeks. This pipeline needs to be managed to avoid a further financial strain on buyers and dealers.

”The sooner people are allowed to trade with vehicle dealers, the sooner their domestic financial pressure might be eased.

”People expected dealers to be open and trading on Monday May 3, as shown by the sharp increase in website traffic on that day. Inquiries to vehicle dealers have increased by more than 150% from pre-lockdown levels.”

INDEPENDENTS RULE, OK?

Mienie believes it is in the interests of potential buyers that every vehicle dealer be allowed to trade under Level 4 and that “specific directions” be communicated urgently by the government so dealers can operate. ”It’s vital that the government Includes independent dealers – they dwarf franchised dealers in number.

”Independent outlets are in the small-to-medium enterprise category – the sector perhaps most at risk. Furthermore, used-vehicle sales outnumber, two-to-one, new vehicle sales.”

Supporting infrastructure also needed to be active. “Licensing departments and roadworthy centres should be opened to facilitate transfer of ownership.”

FOOTNOTE: Mienie believed careful control and commonsense would allow every dealer to trade under Level 4 would not endanger motorists and we need to step-up to help vehicle sellers. With controlled protocols the risk of infection would be low if compared to shopping centres.”

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