The need to enhance vehicle affordability was one of the main points to come out of the CAR Conference at the Auto Africa Motor Show last week.
The need to enhance vehicle affordability was one of the main points to come out of the CAR Conference at the Auto Africa Motor Show last week.
McCarthy Motor Holdings chairman Brand Pretorius, who co-chaired the conference with Seth Phalatse, BMW’s director of government affairs and Africa sales, said all those involved in the market needed to make an effort to achieve this objective. “While there are very rational reasons for the price pressures in the vehicle market right now, the reality is that we are pricing ourselves out of the market.
“In the United Kingdom the ratio between the average price of a house and the average price of a car in the middle income group is 10:1. In South Africa that ratio is 2:1.
“We have to create an environment where new customers can enter the market in substantial numbers. From a retail point of view this is of paramount importance because, while the manufacturers may remain viable by expanding export operations, the dealers need local market support to secure their viability. This should be at the top of objectives shared by the motor manufacturing and retail sectors,” he said.
Pretorius said he believed the motor industry had made good progress as it shifted into a global market. “The vehicle and component manufacturers can hold their heads high as they move this industry ahead as a meaningful contributor to export earnings. The motor industry has shown that we can be world competitive,” he said.
But Pretorius said the South African motor industry still needed to come to terms with the opportunities and challenges that lie ahead. “During the conference Dr, Neal Bruton highlighted South Africa’s number one enemy, the HIV/Aids epidemic. His presentation amplified the dire implications for the economy and social consequences.
Pretorius said the challenge facing South Africa is to act to reduce this, and other, threats to our economic well-being and to keep our economy growing. We have to retain the confidence of the world at large and build on it as a reliable and competitive supplier. By doing this we will continue to attract the foreign investment that is pivotal to growth and prosperity.
“Job creation is a priority. The proposed future structure of the MIDP will put pressure on manufacturers to raise local content in vehicles and this will stimulate employment,” said the McCarthy chairman.
Pretorius said quality relationships needed to be cultivated between all those involved in the motor industry. “Current dealer agreements are one-sided and unfair, leaving franchise dealers with virtually no commercial independence. Progress has been made but it is an area that still needs attention if we are to fully satisfy the broader needs and expectations of our customers.
“The days of mass marketing are numbered. New millennium customers demand that their individual needs are met. In that regard, scientific market segmentation and Customer Relationship Marketing will play an increasingly more important role in our future,” he said.
