In a recent interview with Gareth Edwards from the eNCA Drive, we spoke about what the 2022 new and used car landscape looked like for the automotive industry in South Africa. We also cast our eye on the future trends of 2023 based on the data from AutoTrader. 

New and used car market shifts

AutoTrader started seeing a shift towards the new car market post the pandemic. Since then, the new car market has been gaining momentum with platforms like AutoTrader showing double-digit growth in visits (16% in 2022). Whilst consumers continue to search for used cars, the conversion into buying is flattening.

Used car prices started to increase during and post the pandemic to a point where they have become cost-prohibitive – an ideal recipe for prices to come down. At the moment, the new car market is buoyant and new car sales have grown by 14% in 2022. Whilst there are shifts in the two markets, the “whole pie” is growing subtly.

The most popular vehicles searched for on AutoTrader

The most popular models searched for on AutoTrader in no particular order are: 

  1. Volkswagen Polo
  2. Ford Ranger
  3. BMW 3 Series 
  4. Mercedes-Benz C- Class

However, from a category point of view – SUVs have been the most popular body-type that consumers have been searching for on AutoTrader. This is not only a trend in South Africa but globally. Second to this, is Bakkies, with the Toyota Hilux being the most searched for.

The Asian market has since noticed this growing demand for SUVs globally and has delivered on both car and price, by introducing cars like the Haval Jolion and Chery. 

Is the Asian market dangerous for the used-car market?

Looking at the data from AutoTrader, views for the Haval Jolion have grown from 1 million to 4 million in the last 2 years. That’s almost a four-fold increase. This exponential growth trend is in line with brands like Isuzu and Suzuki which rank 15th and 16th on the AutoTrader platform due to the:

  • Price Point 
  • Technology in the car

And overall, the cars look good!

It’s clear that whilst South Africa is a market that has a passion for German cars, there is still a huge appeal in the Asian market car brands. Remember, like all other car brands, Asian cars also have to pass multiple tests before entering the South African market, and we know the regulations are of a high standard for any OEM to enter. 

Predictions for the South African car market for 2023

I think that the new car market will recover based on the data we’re seeing on AutoTrader, however, due to the downward pressure on used car prices, we’re seeing consumer preferences shifting to new – a trend that will always change. 

Over the last 20 years in the industry, the shift in trends ebbs and flows and the used car market has found a way to recover. The pressure on used cars will make it difficult for used car dealers to sell cars and profit margins will become thin. Fortunately, our car dealers have gone through this before in 2008 and have more experience to weather the storm. 

Another prediction is around creating a more sophisticated way for consumers to search – which starts with transparency. AutoTrader will be releasing more features on the website that give consumers more information as they search for a car.

Lastly, there will continue to be a growing demand for EVs and Hybrids with the European deadline looming in 2030/2035. South Africa is seeing a 200% growth in the sale of both EVs and Hybrids. For example, the Toyota Cross has taken off exponentially since its launch in South Africa which has caused the emphasis on green energy. Hybrids continue to allow consumers to still travel long distances, their fuel consumption is low, consumers do not need to wait long to charge and the price point is within the sweet spot that consumers are looking for i.e. under R500 000.