Over the last few months we have heard the legacy auto makers crying that their vehicle sales numbers have been on a drastic decline. They have been blaming the cheaper Chinese models that are growing in demand.
You cannot blame people for moving away from the legacy brands when you see data like this which is quite astounding really. How anyone can afford or justify these prices is beyond me and it would only be the top few percent and why the vehicle sales numbers have plummeted.
The rule of thumb with vehicle financing is a lender will only give you what you can afford and that is roughly 25% of your take home pay. If we look at the cheapest Audi being the A1 which is not exactly great you would need to be earning R46K monthly ($2.6K) which is considered a good salary locally and way above average. I read somewhere the average salary for the small percent that are working id somewhere between R15K and R22K so R46K is way more than the standard type salary.
In the last 10 years the 3 examples above have increased well above inflation considering these are big ticket items that you only purchase every 5 years or so as that is how long most car finances are being 60 months. You are aware that your bread and milk have doubled over that same time frame but those you can make do with, but a car is totally different due to the price.
If a car went up 5% or even 10% annually you would still complain, but it is hard to justify more than 20% because that is criminal. I was stunned to see the value of one of our work cars that is literally 7 years old and is worth more today than what we originally paid for it back in 2018. That does just not make sense and is hard to comprehend how this can even happen. Where is the value as a second hand vehicle should not increase in value unless it is an old classic.
The 3 brands highlighted here being Mercedes, BMW and Audi have seen their sales drop from 74,015 vehicles in 2014 down to 23,881 in 2024 which is a 68% decline. Mercedes is the biggest loser being down 82%, Audi down 70% and BMW 50%. These are hefty knocks but one could argue if their prices were 25% cheaper like they should realistically be then maybe their sales figures would not be as bad.
The idea that they think they can justify these types of prices is baffling because obviously they have priced themselves out of the market. If the sales are no longer happening you should be looking at your business and this is too obvious. SA has 60% unemployment with many companies struggling to survive with many employees on a salary freeze yet the legacy brands think they can just up their prices each year. This has to change and you cannot just blame the Chinese for their predicament today.