Mercedes-Benz’s new GLC Coupé pricing has raised a few eyebrows
For those holding out hope for a drop in car prices this year, the wait seems likely to extend further.
While America and the United Kingdom have witnessed a decline in car prices, South Africa is grappling with an opposing trend, as reported by industry insiders.
In the United States, Carscoops, a prominent auto publication, notes a notable drop in car prices.
The publication reports:
The combination of increased new vehicle supplies and sluggish sales contributed to a decrease in the average price paid for new vehicles in January 2024. The industry’s average transaction price for a new vehicle in the first month of the year reached $47 401.
Across the pond in the United Kingdom, Evo reports dealers offering substantial price cuts on new and pre-registered models, aiming to clear stock before the year concludes. This move follows a surge in new car sales and growing dealer stock as production capacities return to pre-pandemic levels, according to Evo.
However, the same downward trend is not anticipated to reach the shores of South Africa.
Brandon Cohen, chairperson of the National Automobile Dealer’s Association, anticipates vehicles becoming more expensive. Two factors contribute to this expectation, Cohen notes.
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Firstly, he mentions the geopolitical tension in the Red Sea, asserting that while it shouldn’t directly affect the market, the additional costs for manufacturers will be globally dispersed, impacting prices locally.
Secondly, Cohen expresses concern about additional taxes, stating that almost half the price of a car is composed of various taxes. Despite the desire for relief, he sees little likelihood of it materialising in South Africa, especially with government striving to increase fiscal income.
Cohen urges:
Vehicles truly are access to mobility, access to the economy. So I suppose the only thing we can ask for is if we can’t get the prices down from a tax perspective, please don’t put them [taxes] up.
In addition to the anticipation of increasing prices for new vehicles, South Africa’s second-hand car market faces a similar scenario.
During the Covid-19 pandemic, the market experienced a surge in prices due to low stock of new vehicles. Cohen explains that dealers purchased used cars at exorbitant prices, and only now are these working their way out of the system.
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While Cohen believes that most of this stock has cleared from networks, he anticipates a gradual decline in prices. However, he cautions that high demand for used vehicles may impede the rate at which prices come down.
Mikel Mabasa of the National Association of Automobile Manufacturers of South Africa notes that the second-hand market remains robust.
He highlights the longevity of cars on the market today and customers’ comfort holding onto them. Additionally, insurance offerings such as scratch and dent products contribute to maintaining the condition of used cars.
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