‘VW emissions scandal has not affected sentiment in SA’

 JOHANNESBURG – The negative sentiment in some parts of the international automotive market in the wake of the Volkswagen emissions scandal has not found its way to South Africa, automotive stakeholders have argued.

Speaking at the Standard Bank People’s Wheels Awards, Guy Kilfoil, general manager for brand management at BMW, said while sentiment has been affected in Europe, for South African car buyers affordability is a much greater concern than environmental factors.
 
Volkswagen AG in September admitted that it cheated on emissions tests involving diesel cars in the US, drawing widespread attention to practices in the automotive industry globally.
 
Selvin Govender, marketing director at Mercedes-Benz Cars South Africa, echoed Kilfoil’s sentiment.
 
“I don’t think we see the impact in the South African market. I think the brand equity of these international German brands has been a lot stronger.”
 
Speaking to Moneyweb on the sidelines of the conference, Matt Gennrich, general manager: communications at Volkswagen Group South Africa (VWSA), said while this was not a pleasant issue, Volkswagen will recover and come back stronger.
 
Gennrich said in South Africa the impact has been relatively minimal and its local arm had two of its best sales months in September and October this year. In South Africa the compliance standard is EU2 and its local diesel vehicles comply with this standard.
 
But while the recent focus has mainly been on Volkswagen, the entire global automotive industry has come under increased scrutiny.
 
Des Fenner, general manager for Datsun South Africa, said consumers are much more informed and manufacturers need to make sure everything they do is well planned and executed – they are under the spotlight.
 
Kilfoil said there are lessons to be learned in any market from events like this. While consumers are savvier, they have also become more cynical.
 
He said when a consumer’s mind was made up about something, it has become very difficult to convince him otherwise.
 
A few years ago, the average consumer visited a dealer up to six times to figure out what he or she wanted to buy, to get a quote and to take a test drive. When a customer enters a dealer nowadays, the customer already has five competitive quotes, knows the specifications and what he or she wants to buy. In some instances, it is actually easier for the sales person to mess up the sale than to close it, he said.
 
Consumers are also turning to other channels such as peer reviews and social media to justify their decisions, Govender added.
 
“The sales process is changing completely,” Kilfoil said.
 
But while consumers are getting a lot more sophisticated as product information becomes more readily available, regulators are also likely to tighten the screws.
 
Nicholas Nkosi, head of vehicle and asset finance in Standard Bank’s retail banking division, said South Africa will probably see more intrusion from regulators as it generally follows global trends. More transparency and disclosure will probably be required.
 
From a sales perspective, the next 12 to 18 months will likely be tough for the local automotive industry. According to figures released by the Department of Trade and Industry (dti), new vehicle sales have declined 4.5% year-on-year to 517 322 units in the year to date, with new passenger car sales, which represent about 70% of overall new vehicle sales, down over 6%.
 
Against a background of considerable rand weakness and the negative impact on pricing, and a rising interest rate environment, the market will likely remain under pressure during 2016.
 
Source : http://www.moneyweb.co.za/

Posted on : 22 Nov,2024 | News Source : ABNews

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