/ 2 November 2006

Back-door pricing

Look beyond the price tag when buying a new car, because some cars now come with expensive repair bills. In the lower price range, for instance, you may end up paying just R44 to replace the fan belt, or R678, depending on which car you buy.

Take the case of the Citroen C2. Although it is the second least expensive car in its lower price segment, its spare parts basket as a percentage of its selling price is about the same as those of the VW Polo and the Opel Corsa combined.

As the car is made in France its spare parts have to be imported and, therefore, are dependent on factors such as the strength of the rand and the nature and the size of the car part. In some instances spare parts for the C2 cost more than those of pricier cars. For example, its headlights cost more than the Audi A4, a car that is almost twice its price.

If the parts to be imported are deli­cate, like windscreens, or large, like bonnets, it means the client pays more and has to wait while the parts are shipped.

Insurance companies first establish whether a vehicle is locally made or is imported before determining your premiums. The Kinsey Report notes that “body [crash] part prices are important because they affect your insurance excess, premiums and the write-off point of your vehicle in the event of an accident”.

If your Toyota’s fender is destroyed in an accident with a Citroen C2 you will, of course, pay more for the latter’s spare part, which that has to be shipped from France. All these add-ons become incrementally more if you have to import the parts from France for the Citroen, or from Japan for Daihatsu, Kia and Ssangyong. South Africa imports Hyundai from the South Korean peninsula, and the Ferrari and Lamborghini, marques for the super rich, hail from Italy.

It is a given that these cars are expensive, but a comparative look at cars within the same lower price range is instructive: the spare parts basket for a locally made car costing between R110 000 and R140 000 is 22% of its selling price; it is 28% for an imported vehicle. In the R141 000 to R170 000 range the differences are more staggering. Although both are in same price range, spare parts amount to 15% of cost for a locally made car and 32% for an imported one. Although the locally made Opel Corsa costs about R6 000 more than the imported Hyundai Getz, the Corsa’s fuel filter costs R78 as opposed to R278 for a Getz replacement part.

A representative from Top Auto Car Body, a panel beating company, said that while its rates don’t discriminate against imported vehicles, it becomes “more expensive for the client if the damaged part has to be imported”.

This sentiment is echoed by Peter Bezuidenhout of Mutual and Federal, who noted that it is “a fact that it is more expensive to repair an imported car than a locally made car of the same value”. He said concern has been expressed in the insurance industry about the changing nature of the South African car park.

He talked about spare parts being “more difficult to find”. When asked whether it was more expensive to insure an imported car than a local car, he said: “It should be.”

Citroen does not provide sales figures to the National Association of Automobile Manufacturers of South Africa like other industry players. So it is difficult to say how the high cost of spare parts affects sales. But, coincidentally, the cars with the lowest priced parts baskets garnered the most sales, VW Citi Golf and the Toyota Tazz have managed 240 000 sales between them since 2000. Production of the Tazz has since stopped. It seems there is safety in numbers — perhaps one more reason to stay with the crowd.

For more information on the volumes and types of cars coming into the country, log on to www.naamsa.co.za/imports