Changes to choices in buying cars explained

Although many blame the COVID-19 pandemic for the changes in the auto market, where consumers are making significant changes in their choice of vehicle, the CEO of Motus Retail and Rental, Corné Venter, says it comes as no surprise.

Nabeel syed Jk3 Uhdwjcs unsplash

According to a statement, Motus continually analyses the movements within the various segments of the South African market, and when looking at January 2021 compared to previous years, the changes were inevitable and started long before the pandemic.

“The pandemic has meant that many people have no choice but to reduce the size of the car they buy. The future for many potential buyers seems insecure so they are not taking chances with big car repayments that are due monthly and have lowered their sights to more affordable small cars,” Venter said. “The sedan segment, which was a mainstay for many years of private and company transport, has shrunken significantly over the past decade.”

Venter explained that hatchbacks were the first segment to start usurping sedans, with SUVs and crossovers quick to continue this trend. Although the SUV share of the South African passenger market stood at 16% at the end of January 2021, Venter pointed to the so-called crossovers being a big area of growth, growing from 15.8% of the car market in January 2020 to 18% a year later.

“This is supported by the fact that there has been a stream of additional, well-styled and value-for-money models entering the crossover segment over time,” he said in the statement, “with more newcomers due to join the battle this year.”

Motus, as largest retail automotive group in South Africa, is known for the wide range of products representing 27 brands through more than 300 dealerships countrywide. Venter explains how this spread of brands and models provide them with valuable feedback on what is happening in the market in terms of changing trends among consumers.

In January 2020, entry level cars accounted for 46.8% of the total car market with a slight fall to 44.1% this year, but still dominating, showing clearly where consumers are spending their money.

With Volkswagen usually leading these two segments with the locally made Polo Vivo and the imported Polo, and despite the arrival of many new entrants, the Suzuki Swift, swiftly took to the top of the sub-small segment selling 893 units to the 854 of the Polo.

Motus also points out how Toyota is in the process of launching an onslaught in the lower priced end of the market. The new Starlet and Agya have joined the fray already while the locally made Corolla Cross will be a strong contender in the smaller-sized crossover segment when it arrives in the third quarter of this year.

Meanwhile, Venter said in the statement that Toyota’s Corolla remained popular with South Africans. This time it is the extended life Quest, which is manufactured in Durban that manages to keep a strong array of imported models at bay in this segment.

With the very strong SUV segment, the locally built Toyota Fortuner was the clear segment leader in January, with 21.6% of SUV sales and 3.5% of the total car market. Its stablemate, the RAV4, was in a comfortable second place ahead of the Mazda CX-5 in the compact SUV segment.

Although the Ford EcoSport has been the shining star for the past few years, the Volkswagen T-Cross came in strongly in January 2021 topping the segment with 903 units sold, compared to the 557 of the EcoSport and way ahead of the Hyundai Venue (44).

Venter mentioned how passenger cars, although selling 23 742 units in January 2021, were 18.4% lower than the 29 073 cars sold in January a year ago. Despite the tough trading conditions owing to COVID-19, competition between the various brands remained extraordinarily strong.

With most franchises currently being short of stock, Venter predicted that the pressure on most franchises will not ease during 2021. “The tough economic environment will continue to make trading difficult, with consumers seemingly stretching vehicle replacement cycles even further,” Venter concluded.

More Industry News stories

Nissan to kick-start SKD builds in Ghana

Nissan to kick-start SKD builds in Ghana

Nissan will start assembling semi-knocked down kits of the new Navara in Ghana next year, but Nigeria is on hold due to a delays in implementing its auto policy. The CKD kits come from Rosslyn.ry.

  • 22 October 2021
Semiconductor chip shortage continues

Semiconductor chip shortage continues

The worldwide semiconductor chip shortage is not news to anyone involved in the auto industry. However, there does not seem to be an end in sight, at least not as far as new vehicle production goes.

  • 22 October 2021
Read between the lines, says CMH

Read between the lines, says CMH

National new vehicle sales levels are substantially behind those of the past decade, and the return of abundant supply will expose the lack of customers who can afford to purchase a vehicle, says Combined Motor Holdings (CMH) CEO, Jebb McIntosh.

  • 20 October 2021