Used car prices continue to decline in South Africa, according to TransUnion
Johannesburg, South Africa - Used car price inflation in 2009 is continuing the downward trend that marked much of 2008, according to the latest TransUnion Auto Information Solutions Vehicle Pricing Index (VPI).
While new car price inflation for 2008 reached a level of 7.82 percent, up from 3.53 percent in 2007, used car inflation dropped to -0.75 percent, down from 1.07 percent the previous year.
In January 2008, used car prices recorded negative inflation of -0.72 percent, while new car price inflation climbed to a high of 10.29 percent year-on-year.
Mike von Höne, CEO of TransUnion Auto in South Africa says the figures reflect the extreme pressure experienced in the motor industry throughout 2008 as a result of interest rate, inflation and fuel price hikes, which reduced consumer purchasing power.
"Rising new car prices did little to assist the industry. Indeed, this is one of the factors that contributed to the 36 percent year-on-year decrease in the new car sales in January this year. Used car sales fared better than new car sales largely because of declining prices, a result of dealers anxiety to move stock off their floors, and because consumers themselves are having to 'buy down'," said von Höne.
TransUnion anticipates that challenges for the motor industry will continue well into 2009, with additional new car price inflation as well as positive used car inflation.
"New car sales will gradually improve only towards the end of the year which will place used car sales in a favourable position during the course of this year," von Höne adds.
The Vehicle Pricing Indices, developed by TransUnion Auto are the first of their kind in South Africa. They are used to track the changes in the price levels of new and used passenger vehicles and to measure how these are affected by changes in interest rates, supply and demand and the myriad of other variables that have an impact on the vehicle market.
As a global leader in information management, TransUnion creates advantages for millions of people around the world by gathering, analyzing and delivering information. For businesses, TransUnion helps improve efficiency, manage risk, reduce costs and increase revenue by delivering comprehensive data and advanced analytics and decisioning. For consumers, TransUnion provides the tools, resources and education to help manage their credit health, achieve their financial goals as well as make better informed decisions. Through these and other efforts, TransUnion is working to build stronger economies worldwide. Founded in 1968 and headquartered in Chicago, TransUnion has employees in more 25 countries on five continents.
TransUnion Auto Information Solutions is South Africa's leading provider of information solutions for the automotive industry. The company was established in 2005 following the merger of motorONLINE (est. 2000), TransUnion HPI (est. 1997) and TransUnion Mead & McGrouther (est. 1960).