One of the most notable trends in the South African automotive industry this year is the increasing popularity of car subscription and leasing services, as highlighted by AutoTrader. These services provide consumers with alternative methods of car ownership beyond traditional cash payments or bank loans.
Leasing allows customers to drive a new vehicle every few years without the hassle of reselling, while car subscriptions go further by including insurance and maintenance costs in a single monthly fee. This flexible and convenient financial model is appealing to those who prefer not to commit to a long-term investment.
Expanding Access Through Flexible Financial Models
Car leasing and subscription services also cater to subprime consumers who may struggle to secure traditional financing, enabling them to own a vehicle and contribute more effectively to the economy. Notable providers in South Africa include Toyota’s Kinto One and Avis’ iLease. Kinto One has already placed over 2,000 vehicles on the road since its mid-2022 launch, with a significant portion of these subscriptions coming from small and medium enterprises. This trend reflects a growing demand for flexible and hassle-free mobility solutions.
Surge in Online Car Shopping
Another significant trend is the expected boom in online car shopping. AutoTrader reports a 97% increase in annual website visits since 2019, with continued growth into 2024. The ability to research, compare, and purchase vehicles from home is becoming a fundamental part of the car-buying journey. Dealerships are responding by enhancing their online presence, offering virtual tours, online negotiations, and home delivery services. This shift is likely to accelerate as digital infrastructure improves and consumer trust in online transactions strengthens.
Growth in Hybrid and Electric Vehicles
The adoption of hybrid (HEV) and electric vehicles (EV) is set to increase significantly by the end of 2024. The declining prices of HEVs and EVs, advancements in battery technology, and the growing availability of these vehicles from various automakers are driving this shift. Additionally, there is a rising number of motorists seeking to reduce their carbon footprints. South African manufacturers are also focusing on sustainability and decarbonisation, further propelling the adoption of greener vehicles.
Impact on Vehicle Servicing Industry
The rise of HEVs and EVs will impact the vehicle servicing industry, as these vehicles have different maintenance needs compared to petrol and diesel autos. Companies in the servicing sector will need to adapt and upskill their workforce to remain competitive in this changing landscape.
Increasing Reliance on Shared Mobility
Shared mobility, including ride-hailing services like Uber and Bolt and car-sharing platforms such as Mini Sharing, is predicted to become more popular in 2024. As urbanisation increases, shared mobility offers a convenient and cost-effective alternative to car ownership. This trend opens up new opportunities for automotive companies to diversify their services.
Emphasis on Customisation and Personalisation
Customisation and personalisation will be a significant theme in the premium segment, driven by the desire for a unique driving experience and the availability of advanced manufacturing technologies like 3D printing. Automotive companies can leverage this trend by offering more personalised options and features for their customers.
