Weaker supply drives buyers to higher-mileage used cars

Reduced stock availability is driving more used-car buyers in SA to acquire higher-mileage vehicles at higher prices.

This is one of the takeaways from motoring sales portal Cars.co.za, which was commenting on used car market insights in 2021 vs 2020.

Used car prices in SA have soared in the past year while new car price inflation has slowed, as a result of increased consumer demand for pre-owned vehicles. The demand is being driven by consumers trading down, and by the stock scarcity of new vehicles due to the global computer chip shortage.

About 2.4 used vehicles are sold for every new vehicle, compared to a ratio of 2.35 a year ago.

“It’s been a bumpy couple of years for the SA motor industry, with the impact of the Covid-19 pandemic and stock shortages exacerbating an already bleak situation underpinned by a poor-performing local economy,” says Hannes Oosthuizen, Cars.co.za consumer experience manager.

Mileage appears to be less of a concern compared with previous years. The segment for vehicles with a mileage of between 100,000km and 194,999km garnered the most enquiries (20.33%) on Cars.co.za during 2021, and the average mileage was 109,600km.

There was significant growth in terms of enquiries for vehicles with higher mileage, which is at least partially related to stock availability. For example, enquiries for vehicles with a mileage between 150,000km and 199,999km grew from 11.13% to 12.97%, while requests for vehicles with mileages above 200,000km rose from 7.28% to 9.1%.

In terms of vehicle age, the bulk of enquiries were for vehicles first registered between 2014 and 2018, with vehicles from 2017 slightly edging out the other model years with a share of 8.7%.

The used car “sweet-spot” in 2021 remained a vehicle priced between R200,000 and R300,000, with a mileage of just over 100,000km and first registered about three years ago, he said.

At a brand level, most South Africans are loyal to established names, but there are signs that the German premium brands are receding, while Chinese brand Haval is on the rise.

At a model level, South Africans’ demand for old favourites remains strong, while some models, such as Nissan’s long-serving NP200, are growing in popularity. The highest new entry on the model ranking list is Haval’s Jolion compact crossover.

Cars.co.za data reveals that the average price for submitted used car enquiries in 2021 was R236,900, which is slightly higher than the average in 2020. The R200,000 to R300,000 segment accounts for 20.6% of enquiries submitted on Cars.co.za during 2021, with the segment for cars priced between R150,000 and R200,000 slotting into second place, with a share of 16.34%.

In third place is the R300,000 to R399,000 segment, with an 11.82% share of enquiries. “Deeper analysis shows that higher-price segments have grown fairly significantly compared with 2020,” says Oosthuizen.

SA's favourite used car brands 

There has been little change in the Top 10 ranking of brands in terms of customer enquiries, says Oosthuizen, but some shifts are happening.

“It appears premium brands are slipping slightly, and there is significant movement from 12th place downwards. Remember, it takes time for newer brands to gain traction in the used car space and for stock of older, discontinued brands/models to work their way out of the system,” says Oosthuizen.

That said, Suzuki’s move from 17th to 15th place and Haval’s leap from 30th to 22nd position are the standout changes, he notes.

What’s more, even though Chevrolet left the local market in 2017, it is still ranked 10th in terms of enquiries on Cars.co.za, mostly due to the sustained popularity of its Utility pickup in the used market. The Chevy Ute was the 19th most-requested used vehicle on Cars.co.za last year.

“Interestingly, the budget-friendly Datsun brand slipped from 24th to 27th place, only one position ahead of Porsche,” he adds.

Top 10 used car brands in SA 2021 (based on share of total enquiries on Cars.co.za)

1. Volkswagen — 17.68%
2. Toyota — 16.13%
3. Ford — 9.28%
4. BMW — 8.08%
5. Mercedes-Benz — 7.71%
6. Hyundai — 5.79%
7. Nissan — 4.81%
8. Audi — 4.68%
9. Kia — 3.06%
10. Chevrolet — 2.44%

Rise and fall of models

There were more than 800 individual model types listed for sale on Cars.co.za last year, but the top 100 account for about 80% of enquiries submitted, says Oosthuizen.

“As with brands, model rankings change quite slowly, as newly launched vehicles take some time to reach the used market in sufficient numbers to make a notable impact. Similarly, older vehicles that used to sell in large numbers when new can remain popular for a very long time,” Oosthuizen says, again pointing to the Chevrolet Utility as an example.

The biggest mover in the Top 20 was the enduring Nissan NP200, which vaulted five places to 10th, while the biggest loser was the Ford Fiesta, which fell out of the top ten to finish 12th. The highest new entry on the list was the Haval Jolion, which, even though it was only launched in 2021, finished the year in a strong 133rd place.

Top 10 used car models in SA 2021

1. Volkswagen Polo — 6.54%
2. Toyota Hilux — 5.28%
3. Ford Ranger — 3.68%
4. BMW 3 Series — 3.39%
5. Mercedes-Benz C-Class — 3.32%
6. Volkswagen Polo Vivo — 3.24%
7. Volkswagen Golf — 2.78%
8. Toyota Fortuner — 2.12%
9. Toyota Corolla — 1.63%
10. Nissan NP200 — 1.52%

• The Isuzu KB and D-Max are recorded as separate models, but are effectively the same product. Their combined enquiries would put them into ninth place.