Automotive sector in review – affordability and value dominated in 2016

Affordable motoring allows several influencing issues to take place

By Des Fenner, General Manager of Datsun South Africa

When Datsun launched its brand in South Africa in late 2014, dark economic clouds were already gathering on the horizon, and the expectations that the automotive industry was in for a rough ride were already being raised by industry commentators.

By 2016, these concerns had become a reality. New car sales were down across all categories as they mirrored the pressures on personal incomes. The overall outlook for 2017 is no better and the automotive sector can expect challenges.  However, the recent announcements that the base interest rate will not be increased, and that the fuel price will drop by about 44 cents a litre have injected some light onto the horizon.

For Datsun, however, 2016 was the year in which we were able to answer the question most often asked since we reintroduced our brand to South Africa, namely: ‘Why did Datsun choose to enter the market when times are already tough and are going to get tougher?’

The answer lies in our belief that affordability and value will always create a following among motorists.  In 2016, the aim of creating a car brand that answered the needs of a series of niche markets was fulfilled in South Africa.

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Here, as in other countries where Datsun has made a mark, we concentrated on selling cars that are ‘economic enablers’ – providing an entry point for individuals to become mobile and therefore active participants in the job market.  This has meant concentrating on affordability, reliability, realistic maintenance costs and value.  The situation of assembly plants near these major markets (particularly India) was an integral part of this approach.

In South Africa, Datsun has recognised that affordable motoring allows several influencing issues to take place, these include:

  • An emerging middle class becomes mobile and can enjoy personal freedom;
  • Affordable mobility becomes a much safer option – not having to rely on multiple vehicles and drivers for commuting every day removes the risks associated with being a pedestrian, often at night;
  • Reliance on public transport is reduced – with hours shaved off daily commuting quality of life is vastly improved;
  • Opportunities are created to participate more fully in the economy, many of these for a newer, younger generation of motorists;
  • Entrepreneurs are enabled to create sustainable businesses and employment opportunities as economic barriers are lowered.

Embodying these attributes are the Datsun GO, Datsun GO+ and the Datsun GO+ Panel Van, which all have these values at their core. The Datsun GO was introduced to South Africa as an aspirational car for younger drivers, and more recently, the Datsun GO+ to support people who have families and need the flexibility offered by a car that offers multiple seating configurations.

The final offering recently brought to market was the Datsun GO+ Panel Van, a vehicle that is configured for business by local operators, creating new local business opportunities.  Launched simultaneously with the Datsun GO+, the panel van offers the best loading capacity and space in its class – at a price that makes good business sense.

People have pointed out that the entry-level A-segment is hotly contested and that competition can only intensify. What is not often realised is the major cost gap that prevails in the sector. There is a difference of about R 50 000 between the most affordable car in the segment and the most expensive on offer.

Datsun presented itself to this sector relying on its brand and product support to make its mark. Less than two years in the South Africa market and there are already more than 100 dealerships dotted around the country, offering owners the support they require.

We have more than 11 500 customers and have led the affordability index on maintenance and repair costs in the Kinsey Report for the last two years. The 2016 calendar year may have been tough, but we leave it celebrating a great two years and looking forward to a 2017 where Datsun will become even more entrenched in the local market.