South Africa

Sales of supercars appear impervious to the stagnant SA economy

Sales of supercars appear impervious to the stagnant SA economy

Durban - More than 36 000 used vehicles were driven out of dealerships around the country in January and in return the industry pocketed R10.2 billion, which was R900 million more compared with the opening month of 2019.

Included in the figures were six luxury sports cars that were sold in KwaZulu-Natal which had a cumulative value of R28m.

The KZN sales also featured prominently among the top 50 cars sold in the country.

Top of the pile was the 2016 Lamborghini Aventador sold locally, with 4 000km on the clock. The 12-cylinder vehicle with scissor doors cost R7.7m.

Other exotic cars that were purchased in the province included a 2014 Ferrari F12 that fetched R6m, a 2018 Ferrari 488 which went for R5.2m, R3.9m was spent on a 2017 Lamborghini Huracan, a 2011 Ferrari 458 was sold for R2.8m and a 2016 Ferrari California cost R2.75m.

The have-nots might look on the numbers with envy, considering the prevailing tough economic times.

But Dawie Roodt, chief economist of the Efficient Group, said the tendency by some to splurge on expensive goods in tough times was the buyers’ way of making themselves “feel better”.

We categorise this trend as “behavioural economics”, which delves into the psychology of an individual or institution and their resulting economic decision-making processes, said Roodt.

“You will find, quite often when the economy is in recession, that certain industries seem to be recession proof. 

“One such industry is the ‘pet industry’. The reason is that people won’t go on holiday because they can’t afford it.

“Instead, they would buy a dog, because it makes them feel better.”

The same can be attributed to alcohol – some are sad and believe when they consume alcohol they would feel a bit better.

“I believe people go out and buy flashy things like fancy imported cars because it makes them feel better.

“Pretty soon, some people realise they can’t afford the car because the cost of juice (petrol) is too high and the insurance is expensive. Then they decide to flog it after keeping it for a month or two.”

Roodt believes it is “weird” that a depressed economy adds to the turnover of the flashy car business.

“You buy it, and soon afterwards you realise you have made a mistake.”

But he conceded: “We mustn’t be mistaken, there are some very rich people, including the new rouge, who have just come into money.”

Aseed Mthini, the sales manager of SMG BMW uMhlanga, one of the provinces leading exotic car dealerships, said multimillion-rand car sales were usually concluded in cash.

“A guy with a lot of money will not want to pay interest on a R7 million finance deal. That would be like throwing his wealth away. 

“It makes more sense to pay cash.”

Mthini said while this province has clocked some of the biggest sales in exotic cars, the buyers were not necessarily local.

He explained that many Gauteng customers preferred to buy supercars from KZN because local salesmen are generally “hungrier” in taking a deal across the line.

Mthini said to drive off with a supercar is not a matter of just arriving at a showroom.

“There is always a waiting list. The demand is great, so you could wait for months before you get what you’re looking for.”

George Mienie, chief executive of AutoTrader, a popular online platform for buyers and sellers of cars, said it was no secret that the new-car market was struggling with unit sales, while the used-car market did R10.2 billion in sales.

Mienie said: “It is interesting to see that, according to the National Association of Automobile Manufacturers of South Africa, the new car market was 8.1% down in January 2020 versus January 2019. With consumer buying patterns shifting from new to used,  we reached our highest numbers in terms of searches, page views, leads and sessions last month.” 

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