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Motormanpete
 
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Are cars in SA too pricey?

18 June 2014, 07:33
On the face of it, and certainly the emotional response will always be a resounding YES! But come on fellow South Africans, we can do better than that! Because while we seem expensive it may be because we are basing our opinions on misguided ramblings of people who have not done their research. Ya, ya, a Toyota Yaris costs less in some obscure country than in South Africa but when you have a look at the big picture, our cars are on balance, very competitively priced. Don’t believe me? Firstly let’s get rid of the “cars are so cheap in America” issue. Cars are cheap in America because they sell upwards of 20 million of them per year – its simple economies of scale. But have you looked at how much more cars cost in some European countries? Check out the pricing of the Mercedes-Benz A250 7 G-Tronic: South Africa: R450 900Portugal: Euro 42 700 (R619 150)France: Euro 36 300 (R526 350)Germany: Euro 38 437 (R557 336)UK: GBR 26 640 (R717 681) Cough, splutter – the Mercedes is cheaper in South Africa than even its parent home country!  Granted, this a small sample, but the point is clear. There are simply too many manufacturers present in the market for there to be room for much pricing abuse. With over 50 brands and thousands of models on offer - it’s way too competitive out there. All things aside, did you know that the 70th percentile benchmark dealers are lucky to achieve a 3% PBT? That makes the business very, very marginal and frankly I would invest my money somewhere else! So if you want to question whether we are getting ripped off, let’s have a look at a few other industries. Our cell phone calls are some of the most expensive in the world.And a litre of coke by the way costs more than a litre of petrol or a litre of beer. Why? Both the latter have far more complex processes and to add insult to injury, a litre of soda water costs the same as a coke!DSTV must rank as one of the bigger rip-offs. But then they do have an absolute monopoly so when they stop flighting movies on TV made this century and put all the good stuff on Box Office at extra cost – what can we do? But the ultimate problem does not lie with the pricing itself. The harsh reality is that all these products and services seem so expensive because we earn so little compared to Europe and the US.  So next time you question pricing in South Africa, don’t immediately jump to conclusions about everybody being a rip-off. It may be a case of confusing “expensive” with “can’t afford”….
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