McCarthy Motor Holdings estimate more than 250 outlets closed their doors in South Africa over the past 18 months because of the difficult trading conditions.
Dinker Rama, owner of Autorama and the Motorama dealerships in Amalinda and Mdantsane , said he’d altered his strategy to overcome the slump caused by the recession and the National Credit Act.
“Before, I was selling cars for between R80000 and R120000 but now I’m selling vehicles in the R40000 to R60000 range,” he said. “It’s much easier for people to qualify for personal loans than vehicle loans. I’d say about 70 percent of my stock sold is on a cash basis now.”
Auto Africa owner Ian Mackinnon said the market was the worst in his 27 years in the business. “I have noticed an increase in demand but it’s still very difficult for buyers to get finance.”
Mackinnon said he was also looking at selling lower-priced vehicles. “I’m looking at operating a cash business where people don’t have to apply to the banks for loans.”
He added: “I don’t see a big recovery until the banks start loosening up on their credit demands.”
Jason Lamb, sales manager for the Mitsubishi used car division and for Max4 Cars , said: “We’ve been pretty busy on the pre-owned side of the business. The gap between new car prices and used is enormous. A new Pajero 3.2 GLS long-wheel base is R594000 while a one-year-old model with 13000km goes for R450000.”
Nomafuza Bele of Mthatha planned to buy a new Volkswagen Polo 1.6 Classic and was quoted R194000 . She found a 2006 model with 36000km on the clock for R100000 – and it “looks and feels brand new”.
Brad Jones of Car City in Amalinda said after battling for six months there were signs the market was improving and Danie Mare of Auto Pride in Vincent added that “things are starting to pick up now and confidence in the used car market is increasing”.
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