South Africa’s youth are quickly being pushed out of the car market as prices continue to rise at an alarming rate.
This is according to data from Lightstone Auto, which revealed that people between the ages of 15 and 35, who represent 20.6 million (35%) of the country’s 59.3 million citizens, saw a 7% drop in vehicle purchases over the last decade, going from 39% in 2012 to 31% in 2022.
Rising costs
Lightstone attributed the drop in youth purchases to multiple factors, including load shedding, inflation, and consecutive interest rate hikes – all of which have led to a steep rise in the cost of vehicle ownership in the last decade.
A study from WesBank showed that the real cost of car ownership, adjusting for inflation, has risen by a staggering 48% in just the four years since the Covid-19 pandemic – translating to an average ownership bill of R11,627 in 2023, compared to R7,851 in 2019.
This means that owning a set of wheels can take as much as 80% of the average South African’s monthly salary – an issue that is compounded for the country’s youth, many of whom are earning starting salaries or may not be employed at all owing to South Africa’s severe youth unemployment rate of roughly 46%.
However, the single largest issue preventing new drivers from getting behind the wheel is the simple fact that car prices have shot up in the last few years.
According to TransUnion’s vehicle pricing index (VPI), the average price of a car in South Africa went up by 6.3% in quarter one of 2023 alone, with certain body types being worse affected than others.
This issue is not just limited to new models, as second-hand vehicles saw an even steeper jump of 8.1% – a consequence of increased demand as people flock to used dealerships in search of more affordable options.
The Lightstone report shows that the percentage of vehicles financed for less than R200,000 dropped from 25% in Q1 2022 to 20% in Q1 2023, likely due to the fact that now less than eight models that can be bought brand-new for less than that price.
VW accounts for more than 25% of youth purchases, making it a fan favourite brand, and Ford and Suzuki have also seen growing interest, according to Lightstone.
Toyota, on the other hand, has seen the biggest loss in sales from under 35s, dropping from a 20% share in 2012 to a 15% share in 2022.
Crossovers were shown to be the most popular body type for young motorists, going from 3% to 15% market over the course of the last decade.
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