Driving change: The next generation of vehicles

The South African vehicle market has witnessed significant changes over the past few years, largely influenced by external factors such as the COVID-19 pandemic. Brad Kaftel, CEO of the Hatfield Group, recently shared his insights on the current trends in the market during an interview with CNBC Africa. Kaftel highlighted a shift towards pre-owned vehicles, driven by price considerations. The Hatfield Group currently maintains a mix of 55% new vehicles and 45% pre-owned vehicles, with variations based on location. In metropolitan areas, the ratio is closer to one-to-one, while rural areas exhibit a higher preference for pre-owned vehicles. Kaftel attributed this trend to the improved quality of pre-owned vehicles available in the market, instilling consumer confidence in purchasing used cars. Another notable trend Kaftel discussed is the increasing presence of Chinese vehicles on South African roads. Chinese brands such as Cherry and Haval have gained popularity for offering high-quality vehicles with advanced features, contributing to a more competitive landscape in the industry. Kaftel acknowledged the impact of Chinese brands on traditional market players, urging them to enhance their offerings to remain competitive. He emphasized that the heightened competition benefits consumers by providing a broader selection of vehicles with improved specifications. Regarding consumer behavior, Kaftel noted a shift towards increased vehicle financing amid declining interest rates. He revealed that 70% of the Hatfield Group's vehicle sales are financed, with a notable improvement in approval ratios in recent months. Kaftel expressed optimism about the economic outlook, anticipating continued growth in vehicle demand as interest rates are expected to decrease further. He called for a substantial cut in interest rates by the Reserve Bank to stimulate consumer spending and support economic recovery. In conclusion, Kaftel's insights provide valuable perspectives on the evolving South African vehicle market, characterized by a preference for pre-owned vehicles, the rise of Chinese brands, and shifting consumer financing patterns. As industry players adapt to these trends, consumers can look forward to a more competitive market offering diverse and high-quality vehicle options.