New vehicle retail sales in July remained remarkably buoyant in a tough market characterised by rising inflation, interest rates and the fuel price, and an ongoing shortage of new vehicle stock due to chip shortages and logistical challenges.
It is reassuring to see some silver linings out there. The recovery of the Toyota plant from major flood damage at its manufacturing facility near Durban albeit slow, is to be welcomed, as is the opening of new extensions to its central parts distribution facility in Ekurhuleni resulting from a further investment of R365 million in this sector of its customer support business. There was also a welcome cutback in electricity load shedding towards the end of the month, which is always good for business and consumer confidence.”
Of particular importance to the health of the local motor industry was the increase in vehicle exports, with a total of 31 242 units being shipped last month which has finally lifted exports into positive territory on a year-to-date basis for the first time this year, being 2.9% ahead of the corresponding period in 2021.”
The retail dealer sales channel was responsible for 83.6% of the reported overall sales of 43 455 units in July, which was heartening. However, the used vehicle market, which has been booming, is experiencing a slow down due to increased financial burdens taking their toll on the consumer in the face of economic pressures.
On a year-to-date basis the local market, with 297 133 units sold in the first seven months, is 13.9% ahead of the situation at the same time last year, which is good news. Dommisse noted that there is an expected improvement with supply rates of new vehicles and says that the remainder of 2022 will be tough economically.
Naamsa statistics, while acceptable and healthy at more than 43 000 units, were still below market forecasts, partly due to the market leader being unable to supply as well as market conditions on a down turn.
I am confident that our motor dealers will continue to be as resilient as ever and accept the challenges awaiting them in the next five months to the end of the year.
Meet Fatima Motala: NADA Transformation Committee Convenor and Chairperson, Dealer Principal, NMI Umhlanga (Mercedes Benz Umhlanga)
Meet NADA’s newly elected Transformation Committee Convenor and Chairperson. Fatima is the Dealer Principal of NMI Umhlanga (Mercedes-Benz Umhlanga). She shares with us her experience as a woman in the automotive industry, and how her determination and passion for the industry led her to becoming a Dealer Principal, in a traditionally male-dominated environment.
Automotive Retail Financial Performance Trends – October 2020 to May 2022
Inflationary forces underpinned by the post covid supply chain disruptions, the negative impact of the east bloc conflict, China covid lock down actions are demonstrating once again the inter dependence between nations for good and services. These are now more expensive for all nations
The economic outlook for South Africa is being shaped by global trends and policy intransigence in terms of power generation. The automotive sector continues to enjoy positive growth despite the economic head winds.
On the road with Lightstone Auto …
In the latest edition of Auto Insights, Lightstone Auto takes a look at how, while new vehicle sales are climbing, there are less vehicles on the road and they’re getting older! Lightstone’s latest data reveals what SA’s under 35s prefer. Changing preferences is also the focus of a report that assesses the contribution of big OEMs to SA’s new vehicle sales. Finally, take a look at the winners of the Lightstone EchoMBR Ranking Awards and the F&I Star Reacher Awards.
The NADA DPP Roadshow and Broadcast
Join us on the 18th of August, as we present insights from our key speakers; Leon Theron from Toyota SA, top inspirational speaker Quinton Coetzee and a panel of industry leaders including Derik Scorer, Jaco Taljaard, Leo Stucky, and Mark Dommisse.
Biometric Onboarding: Coming Soon to a Face Near You
By Kriben Reddy, TransUnion Africa, auto information solutions vice president
Science fiction has a rich history in predicting technological advancements. Jules Verne’s novel From the Earth to the Moon (1865) anticipated space travel, whilst Fritz Lang’s visionary film Metropolis (1927) showed a world full of robots.
In the late 20th century and early 2000s, facial recognition was a futuristic fantasy. Remember 2001: A Space Odyssey and Minority Report? Today, facial recognition is being used by consumers to unlock their phones and computer screens, and it’s becoming increasingly common during onboarding flows across the financial services industry.
It’s not just facial recognition that’s going mainstream, though. Research by The Economist Intelligence Unit in 2020 pointed to an increasingly influential role for biometrics (either fingerprint, facial or voice recognition) in our lives. At the time, 85% of executives believed biometrics would be used to authenticate the majority of payments in the next 10 years.
In the auto industry, we’re seeing a growing role for biometrics in areas like fingerprint authentication to start a car, and personalise vehicle settings such as music, seat mirror position, navigation, and temperature when an interior camera recognises the driver’s face.
But the immediate opportunity is to use biometrics alongside other identity verification solutions to accelerate the application process and deter fraudsters. At the moment, it’s estimated that outdated onboarding processes and a lack of digital options are driving good applicants away. In fact, studies show up to 70% of consumers drop off during the application process. With loyalty so closely linked to premium service and accessibility, it’s vital to make sure your consumers’ onboarding experiences aren’t cumbersome.
There’s a clear business case for using biometrics. TransUnion research has found South African consumers to be relatively comfortable with advanced identity verification, such as one-time passcodes or facial recognition, in their financial services relationships.
Just over four in 10 (42%) of South Africans said they would be comfortable being asked for advanced identity verification when applying for a financial product online; nearly half when creating an online account at a financial services company (49%); and a similar percentage would be happy to use biometrics when logging in to an existing online account at a financial services company (47%).
What we’re seeing is that consumers increasingly expect businesses to bake in robust security checks into customer experiences. An additional benefit of embedding these solutions into onboarding flows is they can act as a deterrent to fraudsters, moving them away from your ecosystem before they do damage.
Competition is fierce. TransUnion research indicates one in three consumers globally are planning to apply for new credit or refinance existing credit (mortgage, car loan, credit card, personal loan or student loan) within the next year, so optimising the onboarding flow is a top priority.
For example, facial verification can reduce the trade-off between fraud and security, and support efforts to look and feel like a leading technology brand. It’s crucial, however, that a facial recognition solution makes onboarding convenient and doesn’t create too much friction; is inclusive; and prevents fraud by deterring fraudsters and more accurately detecting fraud.
Document verification is a great example of how layered identity verification solutions can shorten the application process. By more securely, quickly and accurately validating consumer-provided identity documents against trusted data sources, you can reduce identity fraud risks while offering a convenient, digital customer experience.
As adoption of biometrics increases, it’s crucial that the auto industry starts exploring available options. Don’t get left behind: a proactive approach now can better position your business to keep pace with this evolving technology that seems to be here to stay.
To learn more about the benefits of optimising your customer onboarding experience, download our new insight guide, Digital Onboarding: A Guide to Unlocking Growth.