Two key pieces of good news emerged for car sellers from KPMG’s 21st Global Automotive Executive Survey.
Published on 7 August 2020, the annual survey this year posed its questions on the future of the vehicle industry to 1,154 automotive executives and over 2,000 consumers from 30 countries, including South Africa.
Among the eight key takeaways on the impact of COVID-19 is the KPMG’s Automotive Institute’s belief that people will move away from public transport and that they are willing to spend more money on their own cars to feel safe.
China, where COVID-19 started, has already reported that “panic-like fear of disease and fever” has led to an increasing demand for vehicles on both high-end and entry levels.
China is of course a very different market to almost anywhere else on the planet, but the report posits that increasing credit volumes could result in growth in demand, which may help explain why South Africa’s dealers have been reporting healthy sales in the third month of lockdown.
The second piece of good news — both for service departments and downstream parts suppliers - is KPMG’s observation that the roll-out of electric vehicles rely on government subsidies. Where government does not subsidise “EVs”, electric vehicles will only be able to survive in certain application areas, such as cities.
South Africa’s government not only does not subsidise electric vehicles, but adds extra taxes on them, which points to local service departments still servicing internal combustion engines for decades to come.
The eighth take-away concludes that in these uncertain times, the only way forward for companies in the auto trade is to “redefine competition towards industry-wide competition” — KPMG’s description of competing and working together at the same time. “This means to collectively ensure supply chain stability, alongside a global readjustment to a reduced demand structure, channelled through digital demand management and service factories.”
Mitsubishi Motors has revived the Pajero name with the launch of the fifth generation Pajero Cross Country. The new model does not simply replace the previous Pajero that disappeared from the market in 2021. Its relationship with the Pajero Sport is equally important, particularly for markets such as South Africa.
Range Rover, long regarded as the original luxury SUV, has introduced its first electric model. The vehicle is built at the Solihull plant in the UK, where Range Rover production has taken place since 1970.
Audi South Africa has introduced the new Q5 range, comprising the third-generation Q5 SUV, second-generation Q5 Sportback, and the performance-focused SQ5 SUV and SQ5 Sportback. The range is built on Audi's Premium Platform Combustion and brings a new generation of petrol and diesel engines to the nameplate.
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