Digital solution for stalled car dealerships
THE MOTOR dealer retail market in South Africa has stalled through the national lockdown, putting thousands of jobs at risk, but digital solutions can give this market a boost.
According to the National Automobile Dealers Association (Nada), there are about 1 600 franchise vehicle dealers in South Africa, employing 60 000 people directly, and nearly 1 million in the automotive value chain with the multiplier effect.
Franchise dealers’ collective investment is worth more than R40 billion, which accounts for 2.5% of the industry’s 6.9% contribution to gross domestic product.
“Motor dealers are an essential part of the automotive value chain, and the longer a restrictive lockdown continues, the higher the number of dealers that will need to close shop. Digital solutions that enable car purchases while avoiding human contact is one area that will give this market a muchneeded boost,” said DealerSA founder David Thomas yesterday.
Lockdown Level 4 regulations gazetted last week allow for car sales to be phased in, under directions still to be announced.
Thomas said in these times, technology-based companies should adjust their offering and provide solutions that help businesses survive the crisis.
Pre-owned vehicle sales were providing a glimmer of hope.
While new-vehicle sales plunged 29.7% last month compared to March 2019, used-vehicle sales increased.
Pre-owned vehicle sales on the AutoTrader website rose from about 30 000 units in March 2019 to more than 33 000 last year.
DealerSA, an online vehicle auction platform, claims it can dramatically reduce the costs incurred by both vehicle buyers and sellers. “Our platform delivers fresh quality stock daily… Our buying process is transparent, and our independence allows us to offer a simplified pricing model that makes the platform cost-effective,” said Thomas.
A bid history was provided to winning bidders. The platform screens users before granting access, verifying they are registered dealers.
The only cost is a once-off administration fee of R500 on all successful sales, which the seller pays.
In the past three months, Volkswagen South Africa, Tavcor Motor Group, Omni Car Group and more than 300 independent dealers had joined the DealerSA network.