JOHANNESBURG – “The Volvos have bad resale values.” This is a statement often heard in South Africa. I’ve heard it a lot lately because I drive a Volvo XC40.
If anyone who’s had the chance to ride in it loves it, they often say, “It’s going to waste a lot of money in the used market.”
I have to admit that was the case in the past. Over a decade ago I owned an S40 sedan that I loved. While this has served me extremely well, it has not generated interest in the second-hand market. had to part with it for lower commercial value in the end. Perhaps this was an early indicator that South Africans were losing interest in sedans, especially non-German sedans, as most D-segment sedans disappeared from the new car price list in Mzansi. .
Last week I reached out to two industry insiders to find out more about Volvo Cars’ resale values in South Africa. Here’s what they had to say:
Breaking the myth of low resale value
“Nothing could be further from the truth. The reality, in fact, is that the brand performs extremely well in the used car business and that many Volvo models are best-in-class in terms of resale values. Says Greg Maruszewski, Managing Director of Volvo Car South Africa.
He says the perception of bad resale values for Volvos is a specific South African challenge.
“This situation does not apply anywhere else in the world. On the contrary, Volvos are seen to have good resale values in other markets – and this is also the reality in South Africa.
“In Europe, dealers don’t want cars to cross borders, so they will often pay a premium to keep the car. However, turning to the local situation, perhaps due to a legacy of low resale values, some South Africans believe this remains the case today. And it certainly is not.
SUVs in high demand in all segments
While the three-year-old XC40 and XC60 are best-in-class in terms of resale value, the one-year-old Volvos retain a presentable 87-90% of the manufacturer’s suggested retail price, Maruszewski says.
But what factors influence resale values?
This is a somewhat complex question, as values are affected by tangible and intangible factors. Brand perception and model popularity, for example, come into play. The same goes for vehicle condition, mileage, engine type and transmission (most people want an automatic). . Rewards can also play a role – the domed trophy cabinets on the XC40, XC60 and XC90 also bolstered their resale values.
Kriben Reddy, automotive manager at TransUnion Africa, says several Volvo models retain strong resale values compared to their competitors in the local used vehicle market.
“Volvos are increasingly popular on our roads. They have a strong focus on the SUV segment and strategically offer the South African consumer attractive, high-specification vehicles at significantly lower prices than their competitors. This will lead to higher resale values as more and more consumers see the value of these remarkable vehicles, ”says Reddy.
Then there are cars that are stars in the used car market. The Volvo C30 hatchback is one of them. You will normally pay on the book value and sell on the book value as well. Buyers are thrilled to acquire one of the Volvos – because you get a lot of cars for relatively little money.
However, ultimately, resale values can be affected by training and education. For this reason, Volvo Car South Africa regularly educates its network of dealers and used car managers outside the network, who trade in Volvos. Priority areas include performance and safety as well as pricing (Volvo has implemented fewer price increases than some German competitors).
“It’s about informing / educating, managing perceptions and, above all, debunking myths,” says Maruszewski.
We will put the new Volvo XC40 T4 to the test next month on a 1,000 km road trip. Make sure to follow @IOLMOTORING and @pritzthecarguy on social media so you don’t miss a thing.