I had an interview on Newzroom Afrika with Stephen Grootes on how COVID-19 has impacted the automotive industry, particularly its effects on car buying trends in South Africa.

South Africa is STILL buying cars

One of the things that is evident in the data is that South African car buying consumers are STILL buying cars – with a bigger swing to used cars, causing the new car market to come under pressure. From the data on AutoTrader, we saw a -13% decline in used car sales year-on-year for the month of June 2020, coming out of a lockdown level five.

In May 2020, searches for cars under R50,000 increased by almost 300%, from pre COVID levels. In June we’ve started to see things normalize, with searches for cars up to R200,000 rising. More evidence that the South African car buyer is choosing used over new and buying down.

Brand loyalty is not a priority

For car buying consumers brand loyalty and sentiment is an extremely fragile thing and a function of many factors and not just about the car itself. Brand loyalty is not about a car brand but extends to showroom experience, how people are handled as a customer, the stuff we don’t see.

OEMs have come out with some amazing new car deals in the attempt to stimulate new car sales like Volvo.

Used car buyers are cautious buyers

Car buyers are cautious buyers at the moment, making sure they get their money’s worth even in tough times. Car buyers are choosing to get a better used car from a feature point of view, for the same money.

There’s so much that’s changing in the car industry, even before COVID-19.

Opportunities

Toyota is amongst the top 10 most searched for brands alongside Volkswagen and BMW – the top three brands that South Africans seem to prefer.

Some might say that COVID-19 may reduce car demand – however, we’re not seeing that in our data at the moment. South Africa is a car-faring nation, which means people have to drive in South Africa. South Africa lacks public transport infrastructure like the UK and America. As a matter of fact, we are seeing the highest search volumes ever on AutoTrader’s website.

Luxury cars are also recovering

Not only are the more affordable cars recovering, we are also seeing luxury brand searches starting to recover too. Cars over R500,000 are seeing an increase in search activity on AutoTrader.