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Motoring 2014: How the wheels will turn this year

Maverick Life

Maverick Life

Motoring 2014: How the wheels will turn this year

For South Africans, 2014 is set to be an interesting and challenging year – and for many reasons. But while the elections and the economy will be major talking points, they will also have a real impact on our motoring lives. DEON SCHOEMAN takes a look at the trends that are likely to shape our motoring year.

Prepare yourself for a rough and challenging ride in 2014. After extended growth and positive trends, the South African motor industry will be facing tougher times this year – and that goes for us motorists, too.

Factors such as the local elections, the weakening of the rand, the softening economy, rising fuel prices and poor service delivery will all have an impact, as will the continuing stand-off between SANRAL and Gauteng’s motorists on the e-toll issue.

South Africans are particularly passionate about motoring. A general lack of reliable and safe public transport, and the long distances we travel as a matter of course, mean that cars mean more to us than being mere appliances.

The long-established local trend of including car allowances in remuneration packages also means that a car remains a highly visible status symbol – and that we’re prepared to spend an inordinate percentage of our income on acquiring, operating and maintaining the shiny cars we drive.

So, what does 2014 hold in store for the South African motoring public? What trends will shape our motoring lives this year?

The demand for used cars will increase sharply

With new car prices expected to increase significantly in 2014, those fancy wheels will move out of the reach of more and more mainstream, middle class buyers.

Those buyers will start looking at pre-owned market, where relatively recent models, some still covered by the balance of a maintenance or service plan, can be purchased at significantly lower prices than the brand new version.

That’s especially true of so-called premium brands, which are appealing not only because of the maintenance plan and the comprehensive service history that comes with it, but also because of the aspirational status these brands enjoy.

There is no doubt that a good, recent-model pre-owned car with two to three years of full maintenance remaining, represents better value than the new car. And remember, it has already absorbed the initial depreciation that all new cars suffer from when first registered.

But there are some negatives: once the maintenance or service plan expires, running costs will increase sharply – so seeking an extension of the maintenance plan becomes vital for anyone considering longer-term ownership. And as with all used cars, the danger of latent defects as a result of misuse or an undeclared accident remains a real concern.

Electric and hybrid cars will become more prevalent

This could be the year that electric and hybrid cars finally become accepted into the motoring mainstream. The momentum around these cars has been building for some time now, and several factors will favour their increased prevalence.

For starters, the promise of reduced fuel consumption will be tempting, given that fuel prices are expected to rise substantially. It’s a fact that hybrid cars driven sensibly will achieve low fuel consumption figures, and the potential cost saving will increase as petrol and diesel become dearer.

Photo: BMW i3

Also contributing should be the improved accessibility of hybrid technology as it becomes more widely applied – although in our market, that will be counteracted by the price increases dictated by a weaker rand.

Perhaps more important is the arrival of our first true electric cars – the Nissan Leaf is already on sale, while BMW’s i3 is due for release by mid-year. Both have limitations in range, but will prove just how feasible all-electric motoring can be. As the tech matures and becomes cheaper, expect more electric and hybrid cars to reach our shores.

Photo: Nissan Leaf

Finally, let’s not discount the growing awareness of the need for environmental responsibility. There is a perception that hybrid and electric cars are more eco friendly – although, given that our electricity is generated from coal-fired sources, that my not necessarily be the case.

However, don’t expect our vehicle park to change overnight: prices of electric cars will remain relatively high in the immediate future, while the cost and availability of electricity make a high take-up of electric cars unlikely.

Expect more Chinese and Indian-made cars

One of the big trends shaping motoring in SA this year will be affordability – and right now, Chinese cars are priced well below their more established rivals, making them increasingly appealing to cash-strapped motorists.

Photo: GWM M4

That also goes for cars manufactured in India, where economies of scale and lower manufacturing costs allow lower retail prices. Already, major brands like Honda and Ford are sourcing some of their entry-level models from India.

Chinese brands like GWM, Chery, Geely and FAW are all poised to make significant inroads into the local vehicle market this year, and while sales have been hampered by older technology and inferior quality, that is rapidly changing as the Chinese auto industry catches up with first-world brands.

Photo: GEELY GX7

Right now, many Chinese cars still lag behind their mainstream rivals in tactile quality and performance terms, while smaller dealer networks also suggests less access to after-sales service and back-up. But there’s no doubt that Chinese marques will see a groundswell of support from SA consumers this year.

Fuel economy will become an important statistic

Because SA motorists are passionate about their cars, power and performance statistics have been traditional yardsticks for decades. But in 2014, fuel consumption will become a key figure to consider.

Fuel prices are set to increase this year as a result of a weakening rand a likely, demand-driven increase in the crude oil price. For commuters, dearer fuel immediately ups running costs, and places further pressure on an ever eroding disposable income.

Those with older-technology cars, or high-mileage models, will feel the impact more acutely, as their cars won’t be frugal enough to begin with. Buyers will also start focusing on smaller, more efficient cars, while dumping larger, older cars in the process.

Photo: DATSUN GO

Even premium brands are likely to see a shift from their larger models to smaller, more frugal cars that still offer the comfort, technology and aspirational appeal of the brand, but in more efficient, and more affordable package.

Of course, rising fuel prices will have a far more wide-ranging impact than dictating car buying trends. Much of SA’s transport network is road-based, meaning that fuel price increases lead to higher prices across the board. With disposable income under increasing pressure, the demand for higher wages will not abate, so labour unrest is likely to continue, too.

Compact crossover vehicles will become more popular

While small cars will become more popular, we can also expect a growing number of compact crossovers to reach our shores – cars that have the footprint of a small city car, but employ clever packaging to boost interior space and versatility.

The Nissan Juke is a good example, linking Micra-sized dimensions to a taller stance and efficient packaging to create a roomy, versatile and appealing interior, while its tall stance adds presence and boosts all-round visibility.

Photo: NISSAN JUKE

Of course, these cars are still small machines at heart, so they’re still relatively economical. And unlike full-sized SUVs, they don’t have to contend with extra weight, and the complexity of a 4×4 system. And compact crossovers are more affordable than full-sized SUVs, too.

Photo: FORD ECOSPORT

The rise of the compact crossover has already seen the arrival of the Ford Ecosport, the Renault Sandero Stepway, and the GWM C20R – and more examples are on the way. But beware – jacks of all trade can end up being masters of none, and like all trends, this one could be a passing fad

Photo: GWM C20R

Aspirational cars will remain in demand

Despite higher fuel prices, higher car prices, a possible increase in interest rates, and a softer economic climate, don’t expect too much of a slowdown in the demand for aspirational cars from premium brands.

Photo: MERCEDES GLA

As I’ve already mentioned, the SA consumer’s relationship with cars is an obsessive and status-driven one, suggesting that the appetite for fancy wheels among high net worth individuals is unlikely to be sated any time soon.

Photo: MERCEDES C-CLASS

Of course, it’s not just the wealthy that want to drive upmarket cars, and too many consumers will still buy cars beyond their means, which means bad debt will probably increase, together with repossessions and insolvencies.

Car prices will increase, as will the cost of credit

There is no doubt that car prices are under pressure, and will rise significantly this year. With upwards of 2 000 models competing for relatively modest volumes, prices increases have lagged behind trends such as the weakening rand and rising production costs, but in 2014, that bubble is likely to burst, or at least deflate significantly.

Car sales have been more buoyant than the economy, driven mainly by keen competition, low interest rates, and incentive programmes that have effectively discounted prices. Some brands, like VW, BMW, Mercedes-Benz and Ford, have also benefited from export programmes to offset some of the import costs.

However, a large portion of new cars sold in SA are imported, and are thus exposed to a weaker rand. As the currency continues to shed value, the discrepancy between retail price and landed cost will have to be addressed.

Despite a continued flurry of new model activity, 2014 could see a reduction in year-on-year demand for new cars. And remember, even locally manufactured cars will be under cost pressures, not only because of the rising cost of imported components, but also due to rising labour costs and the potential of strike-related production losses.

Our roads will continue to deteriorate

Compared to a decade ago, a significant part of SA’s road network continues to deteriorate. The exceptions are the major routes, but SANRAL’s e-toll system has evoked strong protest from almost every quarter, and has also placed much higher demands on suburban routes as motorists attempt to avoid tolled routes.

Poor maintenance at local government level is another symptom of poor service delivery, while the growing vehicle park means more vehicles are using roads never designed for the current traffic density. The shift from rail transport to heavy trucks over the past two decades has also contributed to road decay.

The impact on motorists is wide-ranging. Commutes take longer, and thus cost more. Wear and tear increases, with associated cost implications. Transport costs increase in overall terms, which impacts on the consumer price index. And poor roads also lead to more road accidents.

No wonder the demand for more rugged vehicles – SUVs, crossovers, and light commercials – continues to increase. In rural areas, many once-tarred roads have been reduced to gravel. We may soon go back to dirt roads in the suburbs, too!

Road accident statistics will remain a concern

Compared to first-world countries, SA’s road accident statistics are horrendous – and in the absence of an effective, pro-active policing strategy, this is unlikely to change.

While speed remains a contributing factor in the high road accident tally it is by no means the only one. More visible policing, with a greater focus on addressing poor and reckless driving, as well as unroadworthy vehicles and unlicensed drivers, is urgently required.

For now, revenue-based prosecution and a reputation for corruption has given traffic policing a bad name in many quarters, which is hardly conducive to the effective, positive action that is so sorely needed.

And finally – more new models on the way

Despite all the doom and gloom, SA car buyers can expect another bumper crop of new cars – from entry-level to aspirational, from family transport to sports cars. Among the key arrivals already due next month are the new Toyota Corolla, BMW’s X5, the sporty Chevrolet Sonic RS, and no less than four sporty Audis – the RS7, RS Q3, S Q5 and the S3 Sportback.

Photo: CHEVROLET SONIC RS

Looking further ahead, Alfa Romeo should bring the beautiful but expensive 4C two-seater to SA (Main photo) before mid-year, while the big news at Mercedes-Benz is the debut of an all-new C-class, also on schedule for the first half of 2014. The Three-Pointed Star will also launch the GLA compact crossover, targeting the BMW X1 and the Audi A3.

BMW will add a convertible version of the 4-Series to its line-up, as well as an all-new 2-Series (the new badge for the 1-Series Coupe) and the high-performance M3 and M4 models. But the most important arrival from the BMW stable will be the i3 all-electric car.

Photo: BMW M4

Also expect Nissan to revive the Datsun brand locally with India-sourced entry-level cars later this year, while Ford will bring back the Mondeo mid-sized sedan, but now badged the Fusion. At Honda, the new Jazz just unveiled at the Detroit Motor Show should reach us before year-end, as well as an all-new Ballade, while Jaguar’s rapid and aspirational F-type roadster will be augmented by a hardtop coupé version.

Even more aspirational is Lamborghini’s Gallardo replacement, the Huracan, which might squeak in just before the end of the year. Mini has an all-new, third-generation range planned for release here, while Porsche’s Audi Q5-sized Macan SUV will join the larger Cayenne on local showroom floors.

Photo: LAMBORGHINI HURACAN

It’s going to be busy – and challenging! DM

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