AUTOTRADER SA: Searches Surge During Lockdown

In March 2018, George Mienie – CEO at AutoTrader South Africa – told Enterprise Africa how the company had succeeded transitioning from a print publishing operation into an online, digital offering, pairing buyers with sellers efficiently and affordably. At the same time, the company’s revenue and profits had grown, and AutoTrader SA controlled a 70% market share – seen as the business for a discerning buyer with research and comparison tools, features and expert video reviews as well as great car finance and insurance deals. This was all backed up by 45,000 classified vehicle listings in 2018, a figure which now sits at over 63,000.

Ditching print in 2017, the company is now regarded as ‘South Africa’s most trusted motoring market place’ and it defends its title by maintaining no transactional barriers and directly connecting buyers and sellers by displaying a physical address, telephone number, email address and website address. Accessible through many devices, AutoTrader users visit more than five million times each month and make use of the tools available to find, or sell, their vehicle. In the past 12 months alone, 401 million searches were conducted.

However, 2020 has been the year of absolute change and constant shift. Very few operations have come through the global Covid-19 pandemic without hassle and upheaval. The motoring industry, one already in a state of flux, has certainly faced challenges.

BRAKES ON SALES

Globally, new car sales were slammed in the first half of 2020. The Verband der Automobilindustrie (VDA) — a major German automotive industry body showed massive declines in major international markets including Europe, Japan, USA, Brazil and Russia, and an expectation of total global new car sales dipping by 17% for the full year. In South Africa, the new car market is expected to contact by 20-30%. But there is some optimism across the industry, and those involved are not about the let an important GDP contributor die away.

“Our lack of transport infrastructure means South Africans have to drive cars. Without the public transport systems that the UK or US has, they don’t have any choice,” Mienie said in 2018.

Eric Scoble of Auric Auto BMW in Cape Town told Engineering News that some model lines will always have demand, such as the bakkie which needs replacing for agricultural work.

“In May, only 5% of passenger vehicles weren’t used, and by June most vehicles were being regularly used again,” said Michael du Preez, Executive: Product and Marketing at Tracker South Africa. “Under Level 2 restrictions, which started mid-August 2020, the average distance travelled nationally recovered to more than 90% of what used to be normal.”

AutoTrader is looking to continue to provide its services to customers without interruption until stability returns to the market.

“As we stand together in the midst of guiding our businesses into a new future, it is an exciting time to be alive. As a business, we have seen all time high records in consumer consideration, engagement and conversion to our customers,” Mienie said in the AutoTrader 2020 Car Industry Report.

OPTIMISTIC OUTLOOK

Mike Mabasa, CEO at National Association of Automobile Manufacturers of South Africa (NAAMSA), shared the view of George Mienie, with both stating that now is the time for innovation – particularly around e-commerce and digitising the car buying process.

“This is thanks to the fact that we’re dealing with two cold fronts: the economy and lockdown,” Mabasa said in the AutoTrader 2020 Car Industry Report.

“Companies that prosper going forward” he adds, “will be those that focus on innovation and adapting to customers’ needs. They will need to adapt to the new reality and the new ways of doing things. Those companies that move with the trends and do things differently will stand the test of time. Prior to 2020, some companies were reluctant to go the e-commerce route. Those that did so quickly are seeing the results now.

Mienie believes it is essential for retailers to analyse the information and take advantage of change. “It is crucial that we embrace automotive digital retailing as the new normal. The necessity for social distancing has led to a situation whereby car buyers don’t want to necessarily visit physical dealerships. Automotive digital retailing is therefore vital to the future success of any dealership. It will also open the door for deal structuring elements and processes to be moved online.”

This change in consumer behaviour is not only evident in the fact that people are now encouraged to be socially distant and therefore staying out of retail outlets, but actual searches and information requests have changed, with a new emphasis on affordability.

During lockdown, hatchbacks became the most searched for type of car, with the Volkswagen Golf the most popular search. The Volkswagen Polo the most searched hatchback, the Volkswagen Golf was the second in the R250,000 price range, and Volkswagen was the third most searched brand behind BMW and Mercedes-Benz. The Ford Ranger remained the number one most sold used car, with the VW Polo second, the Polo VIVO fourth, and the VW Golf in ninth.

“According to the 2020 AutoTrader Car Industry Report, the average selling price of the Golf over the past year was R288,049 while the average selling price of the Hilux was R327,807. The dominance of the Golf during lockdown could indicate that motorists were under financial pressure and wanted to minimise their spending on a car,” suggests Mienie.

Across the period under review, more than 177 million Consumer Advert Views occurred through AutoTrader, representing a 59% increase on the previous year.

DRIVING FORWARD

With lockdown easing across South Africa, and the government pushing hard for the total reopening of important sectors, the hope for all in the automotive industry is that confidence returns to the market so stability and sustainability can be installed. Of course, there still remains the issue of the devasted South African economy, but facing a single challenge is easier than battling hard on two fronts.

AutoTrader is continuing to bring buyers and cars together but also bring information to the market to help those buyers make informed decisions, and help sellers to market their vehicles in the right way.

In April, the Jaguar I-Pace EV400 AWD was labelled as the 2020 AutoTrader South African Car of the Year. The all-electric Jaguar also received the World Car of the Year, World Car Design of the Year and World Green Car awards for 2019, making it the first car in history to win three World Car titles.

For some time, South African motor manufacturers and industry professionals have been unsure of the potential for electric cars – mainly due to the expensive roll out required for charging networks alongside the country’s already fragile electricity network. However, with the I-Pace hailed as the Car of the Year by AutoTrader, perhaps the time to consider larger roll out of electric vehicles is now. Mienie says that hybrid vehicles were something of a bridge between traditional combustion engines and electric vehicles when presenting the AutoCentral podcast in October. “We have to go all electric. It’s the way of the future. Hybrids have had their day and maybe they will have their day in the future again but we will see.”

In Europe during lockdown, while sales of new electric vehicles fell, the decline was not as dramatic as combustion engine cars. Many in the sector are taking this as proof of a switching trend as consumer look for more environmentally friendly ways to drive that do not differ drastically from what has become recognisable over the past century.

The next 12 months will be a very interesting time for the automotive sector in South Africa. in the build up to the 2021 AutoTrader Car Industry Report there will be much change as those that are able scramble to take market share by going digital. But even for those who are struggling and looking for assistance making that move, AutoTrader can assist. Its platform is the largest in the country and offers an easy and fast tool that connects buyers and seller seamlessly. In these uncertain times, this type of offering is more valuable than ever.