Deloitte VPI shows increased purchasing intent

The intent of consumers to purchase a new vehicle has increased in the past two months, according to the latest consumer Vehicle Purchase Intent (VPI) index compiled by Deloitte.

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The VPI revealed that the index increased from 92.33 on a 100-point scale in April this year to 95.82 in May and still further to 95.82 in June 2022.

This followed the VPI deteriorating from 102.21 in February this year to 87.10 on March 30, 2022.

Dr Martyn Davies, the Africa Automotive Industry Leader at Deloitte, said 23% of respondents cited “new vehicles on market have features I want now” as their top driver for future vehicle purchase intent.

The other significant drivers of future vehicle purchase intent highlighted by Deloitte are:

  • I am just ready to drive something different (21%).
  • Current vehicle really is not worth the cost to maintain it (15%).
  • I want a more fuel-efficient vehicle (13%).
  • My driving needs have changed (11%).

The Deloitte VPI index is a monthly proprietary measure of forward vehicle demand intent calculated and based on the percentage of consumers who indicate they are planning to acquire a vehicle in the next six months.

Deloitte listed a number of key factors influencing the VPI trend, both positively and negatively.

The firm said the positive trends were:

  • Pent-up demand created by prolonged periods of economic lockdown and pandemic “wealth effect”.
  • Slowly increasing consumer interest in switching to electrified vehicles (EVs).
  • Ongoing hesitation to use public/shared mobility.
  • More leasing and longer finance terms moderating monthly payments.

The negative trends were:

  • Vehicle production/inventory shortages caused by semiconductor crisis and recent flooding of a vehicle production facility in Durban, which is a reference to suspension of production at Toyota South Africa Motors' plant.
  • Increasing transaction prices, rising overall inflation and reactionary interest rate hikes are a key risk.
  • Consumer concern regarding financial capacity going forward.
  • Global supply chain disruptions.
  • Geopolitical instability and commodity shortages.

In terms of the concerns of consumers about their financial capacity going forward:

  • 35% were concerned about making upcoming payments.
  • 73% were concerned about the money they had saved.
  • 58% were concerned about the credit card debt they are carrying.
  • 63% of consumers were delaying large purchases.

Deloitte said there were a number of key behaviours that were impacting mobility.

It said the average daily driving distance declined to 48 km but the percentage of consumers planning to drive more going forward increased to 24%.

However, the percentage of consumers who plan to use public transport more going forward remained static at 15% while the number of days of the week people were working from home declined to 2.8 days.

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