In my recent interview with Thabo Mdluli from Newzroom Afrika, we unpacked insights from the 2020 AutoTrader Bi-Annual Car Industry Report around the performance of the SA automotive industry particularly the second half of 2020,  and we also cast an eye into what the future of automotive could potentially hold for us all.

AutoTrader understands car shopping behaviour

As AutoTrader operates at scale, it is in a position to understand car shopping behaviour, market supply, demand and pricing. It has always been important for to share these insights that underpin the industry which has lead to the production of these reports which are published i.e. AutoTrader Annual and Bi-Annual Car Industry Reports and our special reports, the Electric Vehicle Buyers Survey.

In the latest 2020 AutoTrader SA Bi-Annual Car Industry Report, the main key insight were that South African’s are incredibly responsive and resilient to changes in the macro-environment like the national lockdown. Unpacking these insights was important as automotive businesses needed to be agile enough to make quick business decisions and provide convenient solutions for consumers.

We also saw changes in which cars South African car buyers searched for,:

  • With the R50,000 category changing demand extensively.
  • An increase in demand for used cars from GenerationZ (18-24-year old’s) across the various lockdown levels.
  • Almost half (48%) of car shoppers replaced their cars in under 4 years whilst 32% in under 3 years.

Other key Insights which we found in the same report include: 

  • BMW remains the most searched for car Brand in South Africa
  • R312 794 was the average price of a listed used car
  • 70 429km was the average mileage for all used cars listed
  • The Toyota Hilux was the most enquired used car in South Africa
  • The under R200 000 price range remains the most searched price point

Overall, the industry saw a 10% reduction in used car stock year-on-year. We all know that the new car market is a feeder for the used car market, so, if downward pressure on new car retail sales continues, we could see prices rise in the used car market, as used car dealerships struggle to get good stock.

Generation Z’s demand for cars was on the rise

The Generation Z’s (18-24-year old’s) demand for used cars grew in lockdown only because car shopping consumers were questioning their safety in public transport and even ride hailing services. It was evident from the numbers that these young people felt they would be a lot safer in their own cars than any other.

The shortening of the innovation curve impacts car dealerships

As a result, there is a growing need for car dealerships to employ Automotive Digital Retailing strategies in order to provide real-time online solutions to the South African in-market car shopper.

It’s evident that the year 2020 will go down in history as the catalyst of online retail change, these trends can be seen in the 2020 AutoTrader Bi-Annual Car Industry Report. In the latter parts of 2020, and now into 2021, we find that businesses are looking to new technologies to help move more of the car buying journey online.

Fortunately, we share these views with some of our mutual partners like Naamsa and Generation.e who we collaborate with; along with other stakeholders in the industry. We’re all trying to work with government and legislative bodies and forums to discuss ways to push these ideas even further.

A further look into 2021…

Looking further into 2021, some may say there’s a possibility of #ReBound of the automotive industry,  something I would say is a sign of resilience of the South African car buyer and not necessarily a ReBound. For example, we’ve started seeing over 50% more searches being conducted on AutoTrader in January 2021 than in January 2020.

The buoyancy in the used car market is unprecedented – consumers are either buying up or buying down.

What’s encouraging is that, whilst we had anticipated new cars to decline by -30% year-on-year, in February 2021 new car retail declined by only -12%. It clearly isn’t a bed of roses yet. If we don’t stimulate new car retail sales, used car dealers will continue to struggle to buy good used car stock.