Car price drop forecast

Author: John Oxley

"It's all good news" for motorists. That's the message from South Africa's biggest importer, Manny de Canha, CEO of Associated Motor Holdings, an Imperial Motors subsidiary.

De Canha, speaking on Thurday at the launch of a new compact sports car, the Daihatsu Copen, said motorists could look forward to reducing prices over the next four years as government import duties drop in line with the Motor Industry Development Programme.

"Car affordability is becoming better - prices have not risen in the past two years - while interest rates are low," he said.

In addition motorists should benefit from a new agreement with the European Union which reduces tariffs between its member countries and South Africa,

But he warned that motorists must not expect a flood of cheap Chinese cars on the market.

"There's a barrier to entry in that all cars imported into South Africa must meet SABS standards, which at the moment none of these cars does," he said.

Only LHD

"In addition, China produces only left-hand drive cars, and it's not worth their while to produce these vehicles in right-hand drive for such a small market."

De Canha said he expected the South African market to grow to almost a million vehicles a year over the next few years, based on the growth of emerging black markets

"This year we are going to hit 600 000 including imported products, but that only accounts for ownership by 1.2% of the population.

"In countries such as Australia and Germany they are looking at 3.5% of the population who own cars, which would equate to 1.3-million in South Africa.

However he warned that it would be difficult for South Africa to break through the million cars a year barrier, citing poor harbour and delivery infrastructure and a shortage of skills at dealer level among problems the industry would have to face.