In a year that saw its fair share of challenges, WeBuyCars kept the wheels turning. It showed resilience in the face of a 14% decline in earnings, ultimately recovering with a boost in volumes during the year’s second half.

The figures, unveiled in Transaction Capital’s audited financial results for the year ending 30 September 2023, shed light on the dynamics propelling the South African secondhand car market forward.

It’s an interesting trend, and one that affects many adult South Africans. The new car market is almost inaccessible for first-time car buyers. And it’s become increasingly apparent that secondhand cars can offer more value for the listing price.

Case in point: WeBuyCars, a standout in Transaction Capital’s portfolio and a significant profit driver, experienced notable growth this year, with earnings climbing to R479 million. Despite the first-half slump, the company managed to add a whopping 1,759 parking bays to its national footprint, bringing the total capacity to an impressive 10,339 bays.

Second-hand is king

A closer look at the numbers reveals a noteworthy trend: the consistent increase in the number of vehicles bought and sold.

With an average monthly turnover of around 12,000 vehicles in the latter half of the year, WeBuyCars saw a 13% increase in units sold, reaching a total of 141,851 vehicles in the 2023 financial year.

What’s driving this surge? It’s not just about the numbers; it’s about the evolving landscape of consumer behaviour. Private individuals are steering this growth, contributing significantly to the uptick in finance and insurance income. As WeBuyCars refines its offerings through Gomo and other third-party providers, we can expect this income stream to continue its upward trajectory.

WeBuyCars is not merely a company; it’s a driving force shaping the narrative of the South African secondhand car market. The resilience displayed in the face of economic challenges, coupled with strategic decisions like infrastructure expansion and partnerships, underscores its commitment to navigating the ever-changing landscape of the automotive industry.

The driving force

Adding to this sentiment, the new car passenger market in South Africa has been on a roller coaster, marked by a notable -9.7% dip in July 2023. The used car market, standing as a beacon of stability, continues to chart a course of growth.

Earlier this year, AutoTrader released its used car sales data, providing a compelling narrative. July 2023 witnessed a 8% month-on-month growth in the used car market. The value of used car sales increased from R12.0 billion in 2022 to R12.9 billion in 2023, reflecting a substantial year-on-year increase of 7.8%.South Africa’s Secondhand Car Boom

In stark contrast, new passenger car sales, as reported by Naamsa, the Automotive Business Council, experienced a 6.6% decline in July 2023, with 27,839 units sold – underscoring the volatility in new car sales.

Naamsa’s report on top-selling new cars featured familiar names like the Volkswagen Polo Vivo, Suzuki Swift, and Corolla Cross.

In a twist of perspective, AutoTrader’s Used Cars Sales data revealed a different narrative, with the top-selling used cars in that period being the Volkswagen Polo, Volkswagen Polo Vivo, and Toyota Fortuner – showcasing the nuanced preferences of new and used-car buyers in South Africa.

The used car market is likely to continue outshining its new car counterpart. It’’s evident that South African consumers are increasingly turning to the reliability and value proposition pre-owned vehicles offer.

The narrative is not just about numbers; it’s about the used car market’s resilience and adaptability in navigating the automotive industry’s twists and turns. In a market where trends shift and preferences evolve, the used car segment stands as a testament to stability and sustained growth.