A new online auction platform has gone live in SA, and the founder says it will give the motor dealer network a respite during the COVID-19 crisis.
David Thomas, the man behind DealerSA, says companies must adjust their offerings and provide solutions that help businesses survive the economic impact of COVID-19.
He says many vehicle dealerships are in dire straits and are going to battle to stay solvent in the coming months. Thomas believes his platform may be the solution.
Consulting firm Deloitte says the COVID-19 pandemic has had a swift and severe impact on the globally integrated automotive industry.
“With over 80% of the global economy currently in some form of lockdown and rolling blows to economic activity as more countries are put into lockdown, it is common cause that the world has not faced a pandemic of this scale in recent times,” it says.
The automotive industry remains an important sector in SA and Deloitte says its continuity is thus critical to the country’s future industrial and economic landscape.
The motor dealer retail market in SA has all but stalled during the national lockdown, putting thousands of jobs at risk.
The National Automobile Dealers’ Association says there are about 1 600 franchise dealers in SA employing 60 000 people directly, and nearly one million in the automotive value chain with the multiplier effect. Franchise dealers’ collective investment is pegged at more than R40 billion, which accounts for 2.5% of the motor industry and 6.9% contribution to GDP.
Thomas, a motor industry veteran and co-founder of two existing online auction platforms, shares similar sentiment on preserving the gains of the sector and its economic contribution to the country.
“The motor industry is full of passion and a commitment to deliver quality vehicles to the consumer. It is also a vital part of the motor industry value chain.
“But dealers need all the help they can get, and technology-based solutions provide this much-needed assistance. We developed DealerSA to solve a problem and improve how the dealer network buys and sells vehicles online.”
He says DealerSA will also benefit clients as it will reduce the costs incurred by buyers and sellers.
“Our dealers are critical to the sustainability of the motor industry, and this is why, in developing DealerSA, we focused on the buying process. Our platform delivers fresh quality stock daily so that dealers can meet the current demand. Our buying process is fully transparent, and our independence allows us to offer a simplified pricing model that makes the platform cost-effective,” notes Thomas.
The launch of DealerSA comes at a time when more people have been searching for cheaper car deals as the negative economic impact of COVID-19 continues.
AutoTrader recently revealed that searches for second-hand vehicles under R50 000 have increased by almost 300% versus normal pre-lockdown levels.
A survey by AutoTrader shows the financial well-being of 65% of vehicle-buying consumers in SA has been negatively impacted by the nationwide lockdown, with as many as 30% being under pressure to replace their vehicle within the next four weeks.
New-vehicle sales in SA plunged 29.7% last month versus March 2019 as a result of COVID-19, while used-vehicle sales increased. Pre-owned vehicle sales on AutoTrader rose from about 30 000 units in March 2019 to more than 33 000 last month.
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