Dear Editor,
I'm a bit confused so maybe someone out there can help me to understand the logic behind the car manufacturers/importers and their pricing policies.
Prices have been hiked several times since late last year due to the rand devaluing.
That is reasonable, the price of your product increases so you have to increase the price you sell it at. Car dealers are closing left right and centre and car companies are going into liquidation due to lack of sales.
So then the Rand has been the best performing currency in the world for the last couple of months, it has appreciated by around 20 % against the euro and the dollar and around 30% against the Yen. Have prices come down? No, they are actually continuing to increase.
So you have an industry that is not moving product, they are buying cheaper and they put prices up?
Please someone explain why they think they are exempt from the free market forces that everyone else is battered by? I mean take Chrysler, a bankrupt company, who had another price hike on their Jeep products at the end of May.
Surely they would take their improved cost structures as they are now buying 20% cheaper and pass it on to stimulate sales.
Take BMW, they had a price hike in April and yet the rand is at a better level now than it has been since February 2008, about 10% better. So are prices now 10% better than 2008 levels? Are they at the same level to take into account 10% inflation? No they are around 20% higher!
All the manufacturers/importers are guilty of the same profiteering, although some are now offering cash back sums of up to R 50 000.
The argument that they are protecting second hand values is also a little dubious, this is a free market economy right? Then market forces must dictate prices and the manufacturers/importers should be as efficient as possible and not attempt to price fix.
Can the competitions board not look at why prices are still not being adjusted downwards? Or do they believe that the South African consumer really is that dumb and they can do whatever they want and we will just accept it?
Grant
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Disclaimer: All articles and letters published on MyNews24 have been independently written by members of News24's community. The views of users published on News24 are therefore their own and do not necessarily represent the views of News24. News24 editors also reserve the right to edit or delete any and all comments received.