Consumer intent to buy cars hotting up in South Africa
Deloitte has released its monthly proprietary analysis The Vehicle Purchase Intent (VPI), which reports on the percentage of consumers who have an intention to purchase a vehicle in South Africa in the next six months.
According to the latest results from May 2022, the VPI index for South Africa increased from 92.33 in April to 95.82 in May 2022. 23% of respondents cited “New vehicles on market have features I want now” as their top driver for future vehicle purchase intent. The research is confined to cars, SUVs, MPVs and pick-up trucks.
Ready to satisfy the pent up demand for adventure
The second highest factor driving vehicle purchase intent was: I’m just ready to drive something different (21% of respondents), which may be indicative of a certain restlessness and desire for rejuvenation coming out of lockdowns. 15% of respondents said that their current vehicle is not worth the cost to maintain it. That would make sense as the average age of second hand cars sold by the online platform WeBuyCars in SA is over nine years and valued at less than R200,000 (€11,705).
The market for second hand cars is booming currently. According to an article on BusinessTech, used car sales in the 2022 financial year are up 4% on pre-pandemic levels and the number of searches for used cars is up almost 30%.
Consumers worried about finances
Other interesting factors Deloitte's report highlighted are that over a third (35%) of consumers are worried about making upcoming payments; 75% are worried about the amount of money (or not) they have saved and 63% are delaying large purchases, which bodes well for second hand car market but not new cars.
That said, there is growing interest in switching to electrified vehicles, albeit slow, and an ongoing hesitation to get back onto public transport because of Coronavirus. Added to this is that fact that the availability of vehicle leasing with longer finance terms has increased and 24% of respondents plan to drive more going forward.