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There are few industries that won’t suffer in the wake of the COVID-19 pandemic, and it’s already proven to the death knell for a number of South African companies.
The obvious sectors struggling include the service and hospitality sectors, as well as hairdressers, salons, and travel. All of these are still, for the most part, unable to operate, or have to operate under strict guidelines promulgated under alert level 3 regulations.
The automotive industry also isn’t having a great time at the moment.
Stats on new vehicle sales, released by the National Association of Automobile Manufacturers of South Africa, shows that sales dropped by an incredible 98% during April, when compared to the same time last year.
New cars sales for May aren’t looking much better. Car dealers can now open their doors for business, but they still suffered a 68% decline versus the same month last year.
Which brings us to used cars and the car rental market.
According to Cape Talk, as the local tourism industry screeches to a halt, so too does the car rental sector. Predictions suggest that they might start offloading vehicles into the used car market, which could cause the price of second-hand cars to plummet.
Refilwe Moloto interviewed independent motoring journalist Lance Branquinho:
The outlook is extremely negative… In America, Hertz – the world’s oldest rental car company – is filing for bankruptcy protection…
In South Africa, the lockdown has crushed the rental car market… there’s a huge incentive for these companies to not hold onto the cars for too long… potentially flood the second-hand car market at a time when demand is weak… a glut on the supply side…
As a buyer [of second-hand cars], you’re in a positive position…
The takeaway here for anyone looking to sell a used car is that this probably isn’t the time to do that.
You can listen to the full interview, below.
[source:capetalk]
