Cash crunch sees affordable cars overtake luxury buying

Beemers and Mercs no longer dominating consumers' online car searches

17 May 2019 - 08:30 By wendy knowler
So far this year, the VW Polo is the car most typed into searches on AutoTrader.
So far this year, the VW Polo is the car most typed into searches on AutoTrader.
Image: Supplied

Never mind buying expensive German sedans, South Africans aren’t even ogling them online anymore.

In 2017, the BMW 3 Series was the most searched-for car on SA’s largest motoring marketplace, AutoTrader, and last year it was the Mercedes-Benz C-Class, but the car most typed into searches on the platform so far this year is the far more affordable VW Polo.

This is an indication that motorists are searching for more affordable cars, says AutoTrader CEO George Minnie. “A new BMW 3 Series is priced from R649,000 and pricing for a new Mercedes-Benz C-Class starts at R612,668, while pricing for the new Volkswagen Polo kicks off at R249,900.”

Mienie says that the search patterns of motorists are an indication of consumer confidence and a reflection of the higher fuel price.

“While it isn’t necessarily true that a big car consumes more fuel - many larger vehicles are incredibly economical - the perception nonetheless remains, that small means lighter on fuel,” he said.

The latest National Association of Automobile Manufacturers’ of SA (Naamsa) figures reveal that, yet again, the Polo Vivo is South Africa’s top-selling passenger car with 2,350 sales, second - just - in overall vehicle sales to the Toyota Hilux (2,411).

The Polo, the one topping AutoTrader’s searches, was sixth on the country’s 50 top-selling vehicles' list in April with 1,165 sales, and the BMW 3 Series in 25th place with 354 sales. The C-Class is no doubt also on that top 50 list in terms of sales, but it doesn’t feature because Mercedes-Benz SA only provides Naamsa with overall sales figures, not detailed, model-specific ones.

Total vehicle sales for April was 36,794 units, way behind March sales of 47,687.

Naamsa puts that down to consumers delaying their decision to buy vehicles, especially in the premium passenger segment, due to numerous fuel price increases, municipal rates increases, the Eskom tariff hike and the elections.

The TransUnion SA Vehicle Pricing Index (VPI) for the first quarter of 2019 revealed that vehicle sales were 10% down on the same period in 2018, the seventh consecutive quarter drop.

Kriben Reddy, head of TransUnion Auto, said Eskom's load-shedding also played a role, with the number of valuations being done and the volume of footfall through dealerships being clearly affected by power outages.

Interestingly, a recent study of 325,000 borrowers, conducted by TransUnion, revealed that, faced with the choice of which debts to pay and which to miss when they are debt-stressed, South Africans mostly prioritise their car repayments, contrary to conventional wisdom which suggests that home loans would be people’s number one priority.