New car purchases on the rebound in SA

The first generation Toyota Corolla

By AKANI CHAUKE
JOHANNESBURG – NEW car purchases in South Africa may once again rise as manufacturers and dealers go out of their way to tempt buyers through discounts, preferential interest rates and trade
assistance.
Manufacturers have also been able to steady their prices thanks to
unexpectedly low inflation and interest rates – given the country’s
delicate economic condition.
These are some of the findings of the TransUnion’s third quarter (Q3) 2017 Vehicle Pricing Index (VPI)
TransUnion’s VPI indicated a growing preference among consumers for
affordable, reliable and reasonably young used cars.
The trends recorded in the latest VPI are suggestive of an about-turn that
may see new car purchases regaining some of their lost popularity.
Between Q3 2016 and Q3 2017, prices on new vehicles increased at a slower rate than many would have anticipated, with the new vehicle VPI dropping from 9,9 percent to 3,1 percent, the lowest such percentage since 2013.
In the same period, price increases on used cars increased from 2,8
percent to 3,6 percent, the highest level observed since 2012.
The VPI is a quarterly report compiled by TransUnion that examines the
link between the year-on-year price increases for both new and used
vehicles, drawing data from a selection of South Africa’s most popular
passenger vehicles from 15 top-volume manufacturers. A lower VPI indicates slower pricing increases and, therefore, greater relative affordability for the consumer.
“The cyclical nature of the automotive industry is the main impactor, and the reason that this trend is most likely here to stay for a while,” said Derick de Vries, Chief Executive Officer: Auto Information Solutions at TransUnion.