Fuel price hikes: What, me worry?

Petrol prices are up by 30% since 2013 to about R16 a litre but this figure is not matched by car sales.

The segment that has shown the most growth in this period is the sport utility vehicle, which is a worldwide trend. Data from analytics company Lightstone shows that SUV sales more than doubled since 2013.

Sales of the BMW X5 reached 7 475 in 2017 compared with 1 249 in 2013, Hyundai ix35 sales rose to 18 299 in 2017 from 5 567 in 2013 and for the VW Tiguan, 13 226 and 4 105 units were sold in 2017 and 2013 respectively.

How many miles you will get from your tank is not top of mind for many motorists when buying a car, said Nico Vermeulen of the National Association of Automobile Manufacturers of South Africa (Naamsa).

“Buying a car is an emotional decision and more of a lifestyle choice by consumers. Safety and comfort are features I would say consumers look for when buying a car.

“Consumers tend to bear in mind that [fuel hikes] at that time when they are ready to buy a new vehicle. We have seen fuel prices run up and we have seen prices run down and we are in a negative cycle right now but, in six to nine months’ time, the scenario could be totally different.”

Some cars score well on fuel efficiency, the most efficient being diesel. The Ford Fiesta 1.5 TDCi uses 3.3 litres a 100km and is ranked the most fuel efficient car. The Volvo V40 D2 at 3.4 litres a 100km claims second place and the Renault Captur at 3.6 litres a 100km third, as ranked by the Bizcommunity website.

The BMW X5, according to the company’s website, uses 9.3 litres to do 100km. The Hyundai ix35 claims 6.5 litre/100km and the VW Tiguan 6.1 litres/100km.

Gabriel Maluleke, a sales executive at Alpha Alphina, a BMW dealership, said most people prefer diesel vehicles because they are seen as more fuel efficient.

But tough times mean that some motorists are buying smaller vehicles.

READ MORE: Breakdown — Why is petrol so pricey?

“People in the middle-class range are downsizing because budgets are tight but those in the top-range market are still buying as they have always had money … and enough of it.”

Nedbank economist Isaac Mashego said the increases in fuel prices do not influence vehicle sales significantly unless the increases affect consumer incomes and the cost of doing business.

“In tough times, consumers tend to generally keep their cars for longer or downgrade to a cheaper model, which often supports the small-sized car market.”

New car sales rose up by 3% to 46 678 from 42 950 year on year in June, after a 2.4% increase in the previous month, according to results released by Naamsa on Tuesday.

Thulebona Mhlanga is an Adamela Trust financial reporter at the M&G

Thulebona Mhlanga
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