SHIFT IN SA VEHICLE MARKET: Jeff Osborne, head of Gumtree Automotive, says that consumers will shift towards second-hand cars and automakers should adapt accordingly. Image: Shutterstock
New vehicle sales are slowing due to the depreciation of the rand, despite attempts to combat the downward curve with competitive pricing, reports Keith Dye, chief executive of TransUnion Auto Information Solutions.
He believes automakers are “struggling to move metal and therefore trying to hold prices as much as they can”.
The effect of slowing vehicle sales can be seen in the increase of second-hand vehicles, said Jeff Osborne, head of Gumtree Automotive and former CEO of the Retail Motor Industry.
SECOND-HAND MARKET RISE
Osborne said: “The quality and variety of second hand cars that has become available on the marketplace is improving dramatically. This means that consumers can buy their dream cars for considerably less, and they do.
“I believe we are going to see two things happen as a result of this development. Obviously, consumers are more likely to opt for second-hand vehicles when making a purchase decision, but on the other hand, we’ll also see a shift in dealerships’ strategies.
"I expect we’ll see an even greater uptake in terms of online tools for lead management and generation as dealerships become more competitive.”
‘HEALTHY MIX OF NEW AND USED CARS’
Osborne says that dealers will benefit by placing new and used vehicles online: “The perception might be that only second-hand cars (or cheap cars) are available on online classifieds and similar portals, but the reality is that there is a healthy mix of new and used vehicles, across all brands.
"If positioned correctly, you can not only generate great leads but convert users that were considering a second hand vehicle to look at a new alternative.”
TECH SAVVY CONSUMERS
Osborne said that that automakers need to become more tech savvy in order to compete: “Consumers are becoming more tech savvy – they aren’t popping into their local dealership to browse as a first point of call anymore.
“They are doing in depth online research, reading up on social media and comparing prices. As a dealership you have to keep abreast of this trend. You have to understand how this plays into the buying decision and you have to cater to that.
“It’s not about sticking an ad up on a high-traffic site – the same principles employed in the offline world apply. Following up on leads, putting real effort into the copywriting and photography used... it’s about being an active participant.”