Key trends affecting the SA automotive sector in 2023

Key trends affecting the SA automotive sector in 2023

As far as the local motor shows are concerned, the Festival of Motoring remains an absolute blast and a national key player in the automotive industry, where manufacturers come together to showcase some of their latest innovations.

This year, the Festival of Motoring entered its sixth instalment, and like before, it was held at the iconic Kyalami Grand Prix over a period of three days. It was a must-see for any car aficionado or interested visitor. Powered by key players within the FirstRand group such as WesBank, FNB, and MotoVantage, the Festival of Motoring was a resounding success, thanks to a wide range of car reveals, vehicle displays, and off-road and on-track driving experiences for enthusiasts. 

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Following a media day, the CEO of Ghana Msibi WesBank discussed a number of noteworthy motoring trends that are influencing the local automotive industry. These trends include the price of owning a new car, the urgent need to introduce more affordable electric cars, and the shifting demographics of car buyers. Speaking of new car sales, WesBank’s data suggests that there has been a significant increase in the years between 2012 and 2023, with the highest increase of 21% between 2021 and 2022. 

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Msibi says that the weak rand has had a ravaging impact on new car prices, which can be seen by comparing them. That said, the average deal size on WesBank’s books for ICE cars has risen to over R300,000, while the average price for NEVs is set between R800,000 and R900,000. Msibi went on to say that manufacturers must urgently introduce more affordable EVs for domestic sale to fill in the gap that exists between ICE and EVs. 

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“We can’t wait for a change in Government policy to ensure the survival of the automotive sector. There is an opportunity to stimulate demand for EVs through the introduction of more affordable models, which is critical to ensuring the longevity of the sector.

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 “The picture is not completely bleak, though,” he stated. “There are some green shoots, including the latest consumer price index (CPI) data, which has dropped to 4.7%, the lowest level we’ve seen in a very long time. This brings us very close to a more desirable midpoint, which we anticipate will be sustained for the better part of the coming year as well.”

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Regarding the changing profile of local car buyers, there has been exponential growth in the number of young people making their way into the market segment, with a whopping 700% increase between 2017 and 2021 in the number of millennials applying for vehicle finance through WesBank. “While they are eager to buy, this cohort of customers is very particular in their desired ownership experience. Personalisation, choice, and simplification are among their top requirements."

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While it’s not an easy task to please these new buyers, WesBank has worked so hard to involve itself by becoming more than just a finance house but more of a mobility solutions partner to its patrons. This is made possible by partnering with FNB and MotoVantage, which offer an integrated solution through products like eBucks that can be used to purchase things like tyres and other vehicle accessories. 

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The global automotive landscape is growing, and WesBank says that it acknowledges that the change affects what customers want in their motoring journey and that is why events such as the Festival of Motoring exist to maintain the vibrancy of the local industry while also fueling the excitement. It may not be enough, though; a concerted effort is required from all players.

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