SA’s Used Car Market Performance Amd High Hopes For 2024
The South African used cars market is gearing up for a promising year in 2024. With robust demand expected to persist, projections indicate an increase in transactions compared to the previous year. As more new cars enter the market and demand stabilizes, we anticipate further downward pressure on used car prices.
Whether you are on the lookout for “used cars,” “preowned cars,” or considering “used car dealerships near me,” this piece provides some insights into what lies ahead.
State Of The Used Car Market In 2023
Despite higher fuel prices and a challenging economic environment, the industry remains resilient. SA’s pre-owned sector experienced a substantial growth of R12,932,363,057 in combined sales for 2023, up 7.8% over 2022’s cumulative total of R12,001,698,16.
The country witnessed a remarkable influx of high-quality used vehicles into the local pre-owned market. According to data from AutoTrader, nearly 100,000 more vehicles were listed for sale between January and June 2023 compared to the same period in 2020. Additionally, 18 new vehicle brands entered the market during this timeframe.
Consumer Preferences and Popular Models
Toyota emerged as the favoured brand for price-conscious South Africans, capturing a substantial 16.4% market share with sales of 60,296 units. Following closely were Volkswagen and Ford in the second and third positions, while BMW and Mercedes-Benz rounded out the top five brands.
Suzuki witnessed a surge with a 28.8% increase in market share, and Kia also thrived with a commendable 16.6% growth rate. However, German car brands, including BMW, Mercedes, and Audi, faced challenges, witnessing a decline in sales. Notably, the Ford Ranger claimed the top spot as the most sought-after model, with over 20,000 drivers choosing this Blue Oval bakkie in 2023.
The best-selling preowned cars in South Africa include:
- Ford Ranger
- Toyota Hilux
- VW Polo
- VW Polo Vivo
- Toyota Fortuner
- Mercedes-Benz C-Class
- BMW 3 Series
- Ford EcoSport
- Nissan NP200
- Isuzu D-Max
Industry Insights For 2024
For perspectives on the road ahead, Naamsa council is of the impression that the new vehicle market will continue to face myriad challenges in 2024, including inflationary pressures, protracted geo-political turmoil, increased load-shedding and logistic challenges related to the rail and ports networks.
While the council does have plans to actively improve conditions for motor industry activity, a buy-down trend will likely continue as consumers shift towards more cost-conscious choices, resulting in stronger demand for used cars.
With interest rates staying high, the expected rise in fuel prices, and inflation nearing its upper limit, many households and businesses face economic uncertainty. This makes potential new car buyers wary of making big financial commitments. As a result, they prefer pre-owned cars because they offer reliable value, and the trade-in deficit is smaller compared to brand-new vehicles.
What Does This Mean For Dealerships And Consumers?
The substantial growth experienced in the used car market in 2023, coupled with the surge in demand for specific models, provides a solid foundation for anticipation. For dealerships, adapting to evolving consumer preferences is paramount. Stock availability remains crucial, as by offering a diverse range of used cars, they can attract buyers seeking variety.
As for consumers, thorough research is crucial when navigating the preowned car market. Beyond price considerations, factors like mileage, age, and brand reliability should be carefully evaluated.
While the South African used car market presents enticing opportunities, our stance remains cautiously optimistic. What trends and developments do you foresee driving the market this year?
