South Africa's motor industry has had a turbulent year with long strikes, incredible fuel prices, and a generally depressed economy. A few weeks ago, we wrote about how BMW was considering a price increase across the range, and how other car manufacturers might follow suit. The issue of car prices will always be important. How often do we ask ourselves is this car worth the price I will be paying, and that's not the face value of it, but considering the servicing, the car insurance, and everything else that makes a motor vehicle akin to a sibling of your children because of the investment you put in it.

At this year's Johannesburg Motor Show, the biennial trade fair, Chinese manufacturers like FAW are committing to South Africa's car market, and therefore the rest of Africa, unlike any other manufacturer in the past. They are being clever about it and releasing vehicles that are really affordable. This interests us because in the past we've always assumed that everything made in China is of poor quality. We could list a couple of things that are of poor quality, but there's very little room for the Chinese to bring us sub-standard cars while the South African Bureau of Standards (SABS) is on watch. Cars that are under R100,000 are the new big thing. This looks attractive to younger car buyers who are likely to qualify more easily to buy these cars than what the big guys like Volkswagen and Toyota have on offer right now.

For our purposes, the roll-out of B-segment cars less than R100k could really help the used car market. We are keen to see the re-sale values of these cars in a year's time, where we hope to determine how well (or badly) they conserve their value. In our research earlier in the year, we determined that of the best selling cars of 2012 in South Africa, an entry level Toyota Yaris 1.3 offered the most value for buyers. On average, a one-year old Yaris 1.3 5-door sells for R112994.50, which is still more expensive than what the Chinese are rolling out. And again in 2012, the Yaris 1.3 was awarded best quality status for in the small hatchback segment by the Ipsos Automotive Quality Survey, a bellwether in the industry that researches over 22000 individual passenger cars. So if the FAWs, GWMs and Geelys of the world want to really compete in SA, they have to looks at others not to compromise good quality for price.

Author: Pierre Theron