AutoTrader on the used car market in South Africa

AutoTrader says it saw an 36% increase in searches for vehicles Q2 2021 over Q2 2020. However, normalising for lockdown in Q2 2020, vehicle search growth would have been 26%.

Supporting the notion that consumers are opting for used cars over new as a result of continued economic pressure.

Civil unrest in July caused a -19% decline in search volumes (9-17 July 2021 vs 18-26 July 2021)  for vehicles on AutoTrader, however, the decline was short lived as consumers returned to some normality after just two days. Searches on AutoTrader for used cars are once again growing year-over-year.

While new vehicle production and value chains were interrupted by the civil unrest, it had a lesser impact on used vehicle retail which recovered relatively quickly.

However, as I’ve said before, used vehicle buoyancy is good in the short term but bad in the long term as new car retail is a critical feeder to the used car market.

The knock-on effect of the lockdowns and civil unrest on new vehicle supply, is a recipe for even further future used car price inflation as the vehicle fleet in South Africa ages and consumers buy-up good clean used car stock rather than new.

36% of listings on AutoTrader during Q2 2021 were under two years old (newer than 2019) vs 42% in Q2 2020, further indicating an ageing South African car parc. Year-on-year the reduction was -26%.