When the importation of second hand cars from Japan began, not many people foresaw that these cars would one day dominate the motor industry in Botswana.
These cars were simply dismissed as difong-kong (fake), but now, about 10 years later, it is not just local car dealers who are feeling the pinch, the re-sale market for local second-hand cars has taken an even harder knock.
And now with imports coming from Singapore as well, sales of local cars in the dealerships have dropped as much as 40 percent.
Both local second hand car owners and dealers say selling their cars is now a nightmare and at best, most of them sell at way below the market value, otherwise they risk going for months without a buyer.
If the market was like before, Mota Moatshe who owns a Toyota Conquest 2002 model would sell his car but given the prevailing environment, he reckons, his best option is to keep it.
At least he can afford to keep it, but there are those who cannot afford that - and in many cases they need to sell fast.
Lesang Maswabi, graphics editor at Mmegi does not have the same luxury, he wants to sell because he has other projects that need his immediate attention, but his Jeep Wrangler has been in the classifieds section for months.
And it seems, owning a high value vehicle such as his, is actually his Achilles heel, after-all, he can only bring the price down to so much, as there is still an outstanding bank loan to clear for the car.
He says he has received many enquiries, which have been followed by dead silence, this is not notwithstanding the fact that he is selling it at P30,000 - less than its book value.
He is not alone and car dealers are also in the same pot, thanks to the second hand imports, which have brought down sales of local cars and their re-sale values.
Car dealers say selling a local second hand car for its value is near impossible. “The re-sale market is almost dead,” said Widzani Marobela, sales manager at Gaborone Autoworld, the former Gaborone Delta, Isuzu dealers.
Marobela says as dealers they now have to buy second hand cars from individuals at lower prices because for them to sell the same cars is just as difficult.
If they were to buy second hand cars at dealer prices, they themselves would not be able to sell them for more, she reasons. While she does not complain about the importation of the second hand cars, she says there should be a mechanism for determining the true age and mileage of these cars before they are brought and registered locally.
“It’s a catch 22 situation because it’s a free market economy, but the people who get burnt at the end of the day are the customers,” says Masego Gaborone, sales manager at Naledi Motors.
Gaborone points out that although they service second hand car imports, they cannot be held liable for faults in the cars as they do not have the history, of the cars. He says the demand for used cars has been affected by the availability of Japanese cars, which he says, “basically undercut prices.”
He says that people are now bargaining more when buying local second hand cars because they have the option of going for the imports. He adds that they now deal more with trade inns but they also bargain as much as possible, after-all, they too have to sell these cars and face the same difficulties. Read More…