Gap in car prices widens
2009-04-14 08:26
Author: Joanita Cillié
Johannesburg - The gap between the prices of new and second-hand cars is widening in South Africa, while manufacturers increasingly struggle with the question of whether particular models can remain sufficiently competitive after the large price hikes.
Malcolm Gauld, director of sales and marketing at General Motors South Africa (GMSA), last week predicted that prices of all manufacturers' new vehicles would be 20% to 25% up this year.
TransUnion Auto Information Solutions predicts that in 2009 the prices of new cars will increase much more than those of used vehicles.
The group recently developed the country's first vehicle pricing index (vpi) for new and used cars.
Prices of new vehicles in January were 10.29% more than a year ago. In contrast, used vehicle prices were 0.72% lower.
TransUnion does not ascribe the higher prices only to the weakening of the rand, but says that the rising costs of local production, including higher material prices, also play a role.
It expects that new vehicle inflation will increase as manufacturers try to recoup exchange-rate losses over the rest of the year. Prices of used cars will probably also rise.
In the UK new cars are, for the first time, cheaper than second-hand models, reports Parkers, the vehicle price guide.
In South Africa the stockpile of used cars continues to grow, with banks repossessing some 7 000 vehicles each month.
