Used-car market continues to surge, prices set to rise further
Digital motoring marketplace AutoTrader saw a 36% increase in searches for used vehicles in the second quarter of this year, compared with the same period last year.
However, normalising for the Covid-19-induced lockdown in the second quarter of last year, vehicle-search growth would have been 26%, says AutoTrader CEO George Mienie.
These numbers support the notion that consumers are still opting for used cars over new ones as a result of continued economic pressure, largely owing to the Covid-19 pandemic, he notes.
The civil unrest in July caused a 19% decline in vehicle search volumes on AutoTrader (from July 9 to July 17 this year, compared with July 18 to July 26 last year).
However, the decline was short-lived, as consumers returned to some normality after just two days, notes Mienie.
“While new-vehicle production and value chains were interrupted by the civil unrest, it had a lesser impact on used-vehicle retail, which recovered relatively quickly.
“However, as I’ve said before, used-vehicle buoyancy is good in the short term, but bad in the long term, as new-car retail is a critical feeder to the used-car market.”
The knock-on effect of the lockdowns and civil unrest in KwaZulu-Natal and some parts of Gauteng on new-vehicle supply in July is a recipe for even further future used-car price inflation as the vehicle fleet in South Africa ages and consumers buy up good, clean, used-car stock rather than new, adds Mienie.
He notes that 36% of listings on AutoTrader during the second quarter of this year were under two years old (newer than 2019), compared with 42% in the second quarter of last year, further indicating an ageing South African car parc.
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