AUTOMOTIVE
The second-hand test New-car buyers can be persuaded by price, features and a long warranty, but the second-hand market is less sentimental. A used vehicle has to establish a resale value, a parts history and enough demand for another buyer to take it. Brands that enter aggressively but fail to build an aftersales ecosystem can leave early customers carrying the cost.
Lightstone found that used passenger vehicles have been retaining less of their value since the second half of 2023, as new-vehicle prices stabilised and affordable Chinese and Indian models gained share, and says the growing availability of competitively priced new vehicles could be contributing to that pressure.
Correlation is not causation, though, and used values respond to many forces including interest rates, supply, mileage, and broader consumer demand. But the commercial logic is obvious. A three-year-old vehicle has to compete not only with other used cars, but with whatever a buyer can obtain new for the same monthly repayment.
Motus has already acknowledged the pressure. Its June presentation says the growing choice of affordable new vehicles has weighed on the pre-owned market. The first contest was for the new-car buyer; the next one is for the entire ownership cycle.
Established manufacturers still possess formidable advantages; decades of brand recognition, dense dealer networks, deep parts systems and large populations of used vehicles with well-understood resale histories, and Toyota, Volkswagen, Ford and others are not being displaced simply because more brands have arrived.
Tata and Geely know that history particularly well, having already left South Africa once. This time, however, they return to a market where consumers appear more willing to change badges, and some of the country ' s biggest automotive retailers are prepared to back that change with infrastructure and capital.
Selling the first car proves that a new entrant can compete on price and product. The harder test comes later, when that car returns to the dealership with 80 000km on the clock, a trade-in value to establish, and an owner asking what to buy next. �
28 sabusinessintegrator. co. za