{"id":227880,"date":"2022-06-03T06:46:30","date_gmt":"2022-06-03T04:46:30","guid":{"rendered":"https:\/\/mypr.co.za\/?p=116680"},"modified":"2022-06-03T06:46:30","modified_gmt":"2022-06-03T04:46:30","slug":"fuel-price-hike-bad-news-for-vehicle-dealerships-and-consumers","status":"publish","type":"post","link":"https:\/\/www.myza.co.za\/press\/fuel-price-hike-bad-news-for-vehicle-dealerships-and-consumers\/","title":{"rendered":"Fuel price hike bad news for vehicle dealerships and consumers"},"content":{"rendered":"<aside class=\"scaip scaip-1 \">\n<aside id=\"republication_tracker_tool-2\" class=\"republication_tracker_tool clearfix\">\n<h5 class=\"adtitle\">Republish for Free<\/h5>\n<div class=\"license\">\n<p><button name=\"Republish This Story\" id=\"cc-btn\" class=\"republication-tracker-tool-button\">Republish This Story<\/button><\/p>\n<p><a class=\"license\" rel=\"noreferrer license noopener\" target=\"_blank\" href=\"http:\/\/creativecommons.org\/licenses\/by-nd\/4.0\/\"><img decoding=\"async\" alt=\"Creative Commons License\" class=\"lazyload\" src=\"http:\/\/www.myza.co.za\/press\/wp-content\/uploads\/2022\/06\/fuel-price-hike-bad-news-for-vehicle-dealerships-and-consumers.png\"><\/a><\/p>\n<p><img decoding=\"async\" alt=\"Creative Commons License\" src=\"http:\/\/www.myza.co.za\/press\/wp-content\/uploads\/2022\/06\/fuel-price-hike-bad-news-for-vehicle-dealerships-and-consumers.png\"><\/div>\n<div class=\"message\">\n<p>Republish our articles for free, online or in print, under a Creative Commons license.<\/p>\n<\/div>\n<\/aside>\n<\/aside>\n<figure id=\"attachment_116681\" aria-describedby=\"caption-attachment-116681\" class=\"wp-caption alignleft\"><a href=\"https:\/\/mypr.co.za\/?attachment_id=116681\"><img loading=\"lazy\" decoding=\"async\" alt width=\"200\" height=\"300\" class=\"wp-image-116681 size-thumbnail lazyload\" src=\"http:\/\/www.myza.co.za\/press\/wp-content\/uploads\/2022\/06\/fuel-price-hike-bad-news-for-vehicle-dealerships-and-consumers.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-116681 size-thumbnail\" src=\"http:\/\/www.myza.co.za\/press\/wp-content\/uploads\/2022\/06\/fuel-price-hike-bad-news-for-vehicle-dealerships-and-consumers.jpg\" alt width=\"200\" height=\"300\"><\/a><figcaption id=\"caption-attachment-116681\" class=\"wp-caption-text\">Kelston Motor Group operations director Peter McNaughton says the fuel price hike is bad news for dealerships and consumers. Photo: Full Stop Communications<\/figcaption><\/figure>\n<p>Apart from an immediate shock to the system, today\u2019s fuel price hike of R2.43 per litre for 95 octane petrol at the coast is bad news for both motor vehicle dealerships and potential buyers in the medium to long term.<\/p>\n<p>Kelston Motor Group operations director Peter McNaughton, who is based in Gqeberha, said dealership sustainability was already under \u201cimmense pressure\u201d due to stock constraints that reduce income potential.<\/p>\n<p>\u201cWith things like fuel costs climbing we are seeing a trend of increasing expenses being matched with a reduction in income \u2013 certainly from a dealership perspective.<\/p>\n<p>\u201cThe effects of these increases and resulting inflationary pressures, compounded by other factors, will reduce consumers\u2019 ability to replace their vehicles and therefore we will see a decrease in demand.\u201d<\/p>\n<p>Although increased running expenses might stimulate sales of more economic models, he said history had shown that it was not enough to offset the reduction in demand.<\/p>\n<p>McNaughton \u2013 who oversees 21 dealerships in the passenger, light commercial and luxury vehicle markets across the Eastern Province and Border regions \u2013 expected new stock pipelines to improve in the months ahead, which could see prices being adapted downwards due to increased supply.<\/p>\n<p>\u201cThat being said, the worldwide inflationary pressure being driven by a multitude of reasons, one of which being the higher oil price, will definitely result in higher prices on vehicles going forward.\u201d<\/p>\n<p>He warned that rising fuel costs had a secondary effect on interest rates, which might further curtail demand.<\/p>\n<p>\u201cIt inflates monthly instalments if vehicles are financed and this increased cost of ownership reduces the appetite of consumers.<\/p>\n<p>\u201cWe do however often see a trend of consumers \u2018buying down\u2019 when they can no longer afford the instalments of their more expensive vehicles.\u201d<\/p>\n<p>This could only work when there was positive equity in a vehicle, he explained.<\/p>\n<p>\u201cThe unit must be worth more than what is left to pay the bank otherwise the consumer would need to pay the shortfall.<\/p>\n<p>\u201cWith the increase in value of used vehicles post-Covid, this could be a good way for consumers to reduce their monthly expenses as interest rates climb.\u201d<\/p>\n<p>McNaughton believed that dealerships might be forced to offer better trade-in assistance to increase affordability but this was dependent on the availability of new and used stock.<\/p>\n<p>\u201cObviously, without stock to sell, there is a reduction in volume earnings and neither the manufacturer nor the dealership can afford any form of assistance.<\/p>\n<p>\u201cUsed volumes are negatively impacted by a lack of new vehicle supply as trade-ins dry up,\u201d he explained. \u201cIf stock volumes improve, I do believe there will be trade-in assistance where possible.\u201d<\/p>\n<p>As diesel was a key input cost for farmers, he predicted the increase of R1.10 per litre across the board would create upward pressure on agricultural produce prices as the \u201cmajority of farmers are price takers in South Africa and unable to pass these costs on\u201d.<\/p>\n<p>It was tough to be positive in the current environment, admitted McNaughton, but one had to consider that inflation for South Africans was not something new.<\/p>\n<p>\u201cIn 2008, it was well over 10 per cent. I do think that if you compare our inflationary numbers against places like the USA and UK, we can be proud of what the Reserve Bank has done thus far.<\/p>\n<p>\u201cA major plus was being upgraded to a positive outlook by Standard and Poors recently. If they are seeing good things coming, perhaps we should be doing the same.\u201d<\/p>\n<p><a href=\"http:\/\/mypr.co.za\/contact\/featured\/\">CLICK HERE to submit your press release to MyPR.co.za<\/a>.<\/p>\n<p> <span class=\"post-views-icon dashicons dashicons-chart-bar\"><\/span> <span class=\"post-views-label\">Press Release Views:<\/span> <span class=\"post-views-count\">147<\/span> <\/p>\n<div class=\"entry-pagination pagination\">Pages: <span class=\"post-page-numbers current\"><span class=\"screen-reader-text\">Page <\/span>1<\/span> <a href=\"https:\/\/mypr.co.za\/fuel-price-hike-bad-news-for-vehicle-dealerships-and-consumers\/2\/\" class=\"post-page-numbers\"><span class=\"screen-reader-text\">Page <\/span>2<\/a><\/div>\n<p><a href=\"https:\/\/mypr.co.za\">Source: MyPR.co.za<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Republish for Free Republish This Story Republish our articles for free, online or in print, under a Creative Commons license. Kelston Motor Group operations director Peter McNaughton says the fuel price hike is bad news for dealerships and consumers. Photo: Full Stop Communications Apart from an immediate shock to the system, today\u2019s fuel price hike [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":227881,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","ngg_post_thumbnail":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[9021],"tags":[3257],"class_list":{"0":"post-227880","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-mypr","8":"tag-mypr","9":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/www.myza.co.za\/press\/wp-content\/uploads\/2022\/06\/fuel-price-hike-bad-news-for-vehicle-dealerships-and-consumers.png","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/227880","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/comments?post=227880"}],"version-history":[{"count":0,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/227880\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/media\/227881"}],"wp:attachment":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/media?parent=227880"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/categories?post=227880"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/tags?post=227880"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}