10
www.automobil.co.za
January 2023
industry news
kriben reddy, vice president of auto
information solutions at transunion africa
ike many South Africans, I love my car. It’s
sleek. It’s quick. It makes me smile every time
I get into it. But it may be one of the last cars
I ever actually own myself, as mobility patterns
undergo a massive change in the next couple of
decades.
Many studies have predicted that by 2030,
hardly anyone in the US and Europe will own their
own car. Instead, most people will use self-driv-
ing, electric ride-shares to get around. I’m not
convinced about the timeline, but I do know that
the world of mobility is changing before our eyes.
South Africa’s vehicle sales volumes have been
steadily declining for several years. Many young-
er urban consumers don’t want to own cars, they
simply want to get from A to B. Others want to
own cars, but they can’t. So, how does the au-
tomotive industry create solutions that provide
mobility beyond traditional car ownership?
Right now, there are around 12 million vehi-
cles on South Africa’s roads. Of those, only around
2.4 million are financed, and around three million
insured. TransUnion’s data suggests that less than
15% of vehicle finance applications get approved.
There are around 24 million sales leads being
generated each year – but the industry only sells
around 580 000 vehicles, of which 180 000 are
new vehicles and 400 000 used vehicles.
This tells us a couple of things. Firstly, there
are plenty of consumers who are interested in
buying a car but can’t do so through a traditional
credit application. One way of addressing this is
by finding ways of using alternative data to allow
more people to qualify for credit in order to buy
or lease vehicles.
While that may get more people into cars, it
won’t solve the bigger problem of a vast market
that requires mobility but cannot be accommo-
dated. We don’t have a vehicle ownership prob-
lem. We have a mobility problem. And while
financed vehicles will remain relevant for the
foreseeable future, the real opportunity for the
automotive industry lies in creating alternative
mobility models in line with the global trend of
mobility as a service.
If we look at mobility as a continuum, with
pure ownership on the one side and usership
on the other, everything in between those two
points is mobility as a service – leasing, subscrip-
tion models, e-hailing, taking a plane, carpooling,
public transportation, ride sharing and many
more. In Europe and more developed econo-
mies, ride-hailing and ride sharing have practical-
ly become the norm. They’re a rapidly emerging
trend in South Africa, albeit largely in the major
urban centres for now.
The mobilty as a service model offers sim-
plicity and adaptability and appeals to many
customer segments. Older drivers want to avoid
the annoyances of car ownership, such as main-
tenance and insurance, while younger markets
want to avoid significant outlays and long-term
financial commitments. A growing number of car
manufacturers are already offering subscription
models for their vehicles.
A second driver of mobility as a service is the
increasing urbanisation of our population. It’s es-
timated that 55% of the world’s population lives
in cities. They don’t need a car. They just need
access to transport and that could include every-
thing from public transport, bicycles and scoot-
ers to ride-sharing and carpooling.
In South Africa, we have all the elements
we need for alterative models like subscription.
Think affordable, long-term, flexible car hire.
We have the demand as there is a huge market
of people that want to be mobile but can’t. We
have the supply in the form of massive amounts
of stock of vehicles standing idle at dealer-
ships – and vehicles that don’t move, don’t bring
in money.
TransUnion’s Auto Digital Onboarding product
provides the data and tools to assist our custom-
ers through their entire value chain, starting at
the top of the funnel, lead enrichment, through-
out the qualification and identity checks journey,
and right to through to aftersales. This enables
you to identify other mobility solutions for your
customers, like leasing or rent to own.
Personally, I can’t see myself not owning some
sort of vehicle in my lifetime. But, like the entire
automotive industry, it’s important to be open to
change. Our relevance depends on it.
Are the days of car
ownership numbered?
www.mirf.co.za
Motor Industry
Retirement Funds
Access your Fund
Credit and Benefit
Statements
Dial *134*20054# to obtain your latest fund credit
Register at
https://portal.mirf.co.za/openaccess/
MemberAccessRegistration.aspx
Please use your ID Number and your
Council Number to access your Fund
Credit and Benefit Statements.
WhatsApp 011 561 9301 (Fund Credit, Current
Benefit Statement, Annual Benefit Statement)