Vehicle Pricing After Lockdown: What to Expect
The nationwide lockdown has had an effect on virtually every industry in our country. How will it affect the automotive industry? Read on to see what we predict for the coming year and how we answer some of your burning questions about the effect COVID-19 will have on the automotive industry.
Will I still be able to buy a car?
The good news is that you will still be able to buy a car during the lockdown. In fact, the car buying process remains virtually unchanged up until the point of delivery. In this situation, your new car will be stored at the dealership until their doors are opened again and the lockdown has been lifted. You will also unfortunately not be able to test-drive your car before buying it, but that being said, most dealerships have a virtual or digital showroom where you can view the reviews, specs and details of your car.
Will cars be more or less expensive than before?
This question is a bit harder to answer with certainty than the last. Experts have mixed opinions on what the aftermath of COVID-19 will mean for car sales. Some think that we will be seeing a spike in car prices, while others think that this is the perfect time to purchase a new car thanks to lower prices and better incentives.
There could be a potential shortage in the supply chain due to the mass shutdown of manufacturing plants and the slowing of production. Many factories and manufacturers are not prepared to face a slowdown in production. This means that car prices heavily depend on the sourcing and production of parts and vehicles. Many automotive brands have resorted to air freight instead of ships to import and export parts and vehicles, which is much more costly and could contribute to the rise of vehicle costs. While it may still be too early to judge, we are holding out hope that the automotive industry will work to keep car costs reasonable.
Will fuel prices rise because of the virus?
The recent price drop of fuel has been quite a relief for essential workers who still need to commute to and from work. However, experts warn that this might only be temporary and that we could see a massive spike in fuel costs as soon as covid-19 epidemic is under control. Efficient Group economist, Dawie Rood, explains that “[the] moment the virus epidemic is back under control and the Chinese economy springs back into action, the price of crude oil will spike and we will see massive fuel price hikes in South Africa.”
Our prediction for 2020
As we’ve mentioned earlier, it’s still too early to know exactly what the impact of COVID-19 will be on the automotive industry, but we remain hopeful. Despite the prediction that vehicle sales will decline and production will slow, we know that we will find solutions to deal with and eventually overcome this difficult time.