The buzzword in the auto industry right now is fuel, said George Mienie, the chief executive officer of AutoTrader, a South African auto market.
“The subject is very much on the mind of motorists as they brace themselves for further shocks to the fuel pumps, while also considering the benefits of partially or completely switching off from combustion engines,” he said.
Mienie’s comments come in the form of a “foreword” to the AutoTrader Mid-Year Car Industry Report 2022, published this week. He said the report pointed to an increased propensity for fuel-related searches and increased traction for electric vehicle (EV) production and adoption in the country.
“Consumers are facing a perfect storm: uncontrolled fuel price increases go hand in hand with challenging macro and socioeconomic conditions, meaning they have less disposable income,” said Mienie.
At the same time, persistent supply chain problems have limited the availability of new vehicles, driving up demand and thus prices in the used car market. As a result of these shifts and the increased need for transparency, consumers are buying and selling cars differently, he said.
Speaking about the rapid increase in attention to electric vehicles in recent months, Mienie cited data from the International Energy Agency showing that global sales of electric cars, including all-electric and plug-in hybrids, doubled to a new record by 2021. of 6.6 million, with more sold weekly now than in all of 2012.
“And also here in South Africa we see the move to electric cars,” he said. This is confirmed by our records; The search for electric vehicles – not by fuel type but by available models – has increased due to the changing needs of car buyers.
Fuel economy is an important consideration for car buyers in the market. However, current market conditions have forced car buyers to consider fuel efficiency and how it affects the cost of operating a vehicle as a new top priority, Mienie said.
Globally, the fuel price has led to significant changes in car buying behavior around new energy options. A primary indicator of this change can be seen in fuel type searches, the chief executive said.
In 2022, the number of car buyers using the fuel filter will increase by 27% year-on-year. In previous years, fuel type has been a secondary search filter, primarily used when car buyers are considering cars with a bakkie body, according to AutoTrader.
“The increase in the different fuel types is interesting. While petrol and diesel respectively receive the most searches for fuel types, they have also grown the slowest. In fact, they grew more slowly than the site average of all fuel type searches,” says Mienie. In 2022, searches for petrol and diesel increased by 26% and 24% respectively.
With regard to new fuel types, searches for hybrid and electric fuels are what car buyers pay the most attention to, the CEO said. He emphasized that this is of a much smaller base than the traditional fuels petrol and diesel. In 2022, searches for hybrid and electric fuel increased by 129% and 100%, respectively.
According to insurer Naked, motorists in South Africa are not yet at the point where they are making significant shifts to combat the rising costs of owning a car — such as downgrading vehicles or selling the family’s second car — but there are have been some changes as drivers try to cope.
- Car owners simply drive less or make an effort to shorten their time on the road;
- New car buyers buy cheaper vehicles;
- When purchasing auto insurance, motorists choose to risk a higher deductible to keep the monthly premium low.
Naked said most passenger cars can be divided into five categories:
- Traditional cars with good value for money (Toyota, Volkswagen, Ford, Mazda and Nissan)
- Higher vehicles (BMW, Mercedes, Audi, Lexus and Volvo)
- Established European cars with good value for money (Renault, Fiat, Citroën and Peugeot)
- Good value for money emerging cars (Suzuki, Kia, Daewoo, Chery and Mahindra)
- Other (niche).
“The first group makes up about half of the cars that people buy and insure. However, the fourth group has risen from about 20% to 26% of the cars insured by Naked customers. This shows that consumers are increasingly comfortable relying on a new range of brands in their quest for value for money,” the report said.
Read: More good news on the horizon for motorists in South Africa