Load shedding is having a devastating effect on vehicle auctioneers. That's according to Darryl Jacobson, managing director of True Price.
He says that attendance figures at vehicle auctions have tumbled while bidding is at an all-time low. "I have been in the vehicle auctioneering game for 30 years now. I've never seen anything like it. Vehicle auctioneers are reeling from the impact of load shedding, which has been quite devastating for the sector," he reveals.
True Price is an innovative start-up that provides South African
motorists with free vehicle evaluations. These evaluations are based on prices paid on auction. Accordingly, Jacobson and the rest of the True Price team attend most, if not all, of the bank repossession auctions in Gauteng. And Jacobson says that, whereas attendance levels were good and bidding was brisk, the advent of load shedding has seen everything change. "It's eerie to see how empty the auction arenas are. In the past, an empty auction hall could be supplemented by vociferous online bidding. However that's also not happening now," Jacobson reveals.
He explains that the impact of load shedding is much wider than many people realise. "It is impacting in all sorts of ways. Firstly, people don't want to attend the auctions during load shedding. The mood is too sombre and they are not in an upbeat shopping mood. Also, they fear getting stuck in traffic, because many of the traffic lights aren't working," he comments.
Secondly, because there is little foot traffic on dealership floors now,
dealers don't need to restock. "When we chat to dealers who do actually attend auctions, they tell us that their businesses die during load shedding. Those dealers who do attend auctions are only buying one or two cars, versus 15 to 20 prior to load shedding," Jacobson reports.
During load shedding, online bidding crashes too. "Clearly many of the dealers who normally bid don't have generators and therefore they have no internet access," Jacobson explains.
While dealers, banks and vehicle auctioneers are finding themselves in the most horrendous situation, Jacobson says that one should spare a thought for the motorists who are being impacted by load shedding too.
"There is a tragic story behind every bank repossession. Clearly, the
motorist has fallen on hard times. Now things are getting even worse for those motorists. Auction prices are a tangible indication of supply and demand. When demand is at an all-time low on auction, as we are currently experiencing (because bids are scarce), the prices paid for bank repossessed cars are at an all-time low. So, not only has the motorist lost his car, but he now owes the bank a massive sum of money, because the price achieved on auction (during load shedding) is so low," he explains.
Given the many negative consequences of load shedding, Jacobson says he can only hope that it will come to an end sooner rather than later. "We are all mindful of the sorry state of affairs that Eskom has found itself in. We know that load shedding will not cease overnight. But I really hope that it can be resolved sooner rather than later. The
consequences are far greater than most people realise – and they are devastating to vehicle auctioneers, the banks, the motor industry at large and also to the man in the street," he concludes.
Original source: True Price
Not all vehicle models and brands are created equal. This is according to an analysis of the actual price a specific vehicle achieved on auction, as a percentage of the original list price for that same vehicle one year earlier.
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