INDUStrY NeWS
he sixth Festival of Motoring, powered by
WesBank, took place at the Kyalami Grand
Prix Circuit at the end of August.
As a key theme during his keynote address,
Ghana Msibi, WesBank CEO, highlighted several
significant trends that are shaping the sector and
will continue to dictate the evolution of the auto-
motive industry in South Africa.
Key among these is the cost of new vehicle
ownership, which, according to WesBank’s data,
has sharply increased in the years between 2012
and 2023, with the highest annual spike being an
increase of over 21%, experienced between 2021
and 2022.
“The less than favourable Rand/Dollar ex-
change rate has not aided in lifting the affordabil-
ity burden for South Africans. One needs only to
look at new vehicle prices to see the devastating
impact of the weak Rand. The average deal size
on WesBank’s books for internal combustion
engine (ICE) cars, for instance, has risen to over
R300 000, while the average price of new en-
ergy vehicles (NEVs) is between R800 000 and
R900 000,” said Msibi.
Msibi emphasised the urgent need to intro-
duce more affordable electric vehicles (EVs) for
domestic sale to close the price disparity that ex-
ists between ICE cars and EVs.
“We can’t wait for a change in Government
policy to ensure the survival of the automotive
sector. There is an opportunity to stimulate de-
mand for EVs through the introduction of more
affordable models, which is critical to ensure the
longevity of the sector,” emphasised Msibi.
“The picture is not completely bleak, though.
There are some green shoots, including the lat-
est consumer price index (CPI) data, which has
dropped to 4.7%, the lowest level we’ve seen in a
very long time. This brings us very close to a more
desirable midpoint, which we anticipate will be
sustained for the better part of the coming year
as well,” added Msibi.
Another positive trend highlighted by Msibi is
the changing profile of car buyers in South Africa,
which is led by exponential growth in the number
of young people entering the market.
“Despite the notion that fewer young people
are interested in owning a car, there has been an
enormous increase in the number of millennials
who are applying for car finance through Wes-
Bank. This number has increased by a whopping
700% between 2017 and 2021.”
“But while they are eager to buy, this co-
hort of customers is very particular in their de-
sired ownership experience. Personalisation,
choice, and simplification are among their top
requirements.
“It cannot be business as usual when selling to
these new buyers,” Msibi pointed out.
“It is clear that the global automotive land-
scape is changing, and we need to acknowledge
that this is affecting what customers want in their
motoring journey. If we are only now planning to
deal with the changing customer dynamics, we
are effectively already behind the curve,” said
Msibi.
“To maintain the vibrance of the local indus-
try and continue to fuel the excitement that is
evidenced at events like the Festival of Motor-
ing, concerted effort is required from all players.
And the time for such efforts is now,” concluded
Msibi.
WesBank highlights key trends
affecting SA automotive sector
www.automobil.co.za
September 2023