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Aug 21, 2006

Thinking of buying a car...? Think again, you middle-class citizen...

While surfing around for information regarding potential cars in SA, I came across the following site: (courtesy MoneyWeb).

Yesterday a controversial, yet informative consumer advice program on MNet called Carte Blanche mentioned that owning a car in SA is the worst possible investment someone living here could do. Most cars averaged a 30% drop in value after its first year of use, while the Citroen's figured really badly. The comparison was conducted against other 'luxury' fixed assets such as boats, planes and cattle (?). Interestingly, the Nguni cattle (a local bovine) scored highly, thus owning such a farm provides the best return on investment.

A car is an essential if you want to survive in the Johannesburg urban jungle. Public transport is dismally poor (the government is apparently on course for a public transport rejuvenation through taxi & bus upgrades & the development of a new train service as part of prepping for 2010), and the local taxi's and trains are only recommended for thrill seekers with well-covered life insurances.

The motor industry segment in SA is one of the most profitable of all industries. Cars apparently costs 30% less in countries like New Zealand. Still, its a major status symbol among the up and coming Bluppies (non-derogatory term given to the fast growing black executives (yuppies) in SA) in Jozi (nee Joburg). Research by a weekly Sunday newspaper revealed that SA has one of the fastest growing number of millionaires in the world (other countries in the top 4 include South Korea and India).

SA has great potential, but I fear, unless government does something to curb the growing divide between the rich and poor, the bubble is going to burst. The regular industrial strikes that has made the news lately is testament to that.


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