The cost of entry-level luxury vehicles like the Mercedes-Benz A-Class, BMW 1 Series, and Audi A1 has skyrocketed for South Africans.
Only the wealthiest buyers can now afford these cars, which were once reasonably priced for families in the upper middle class.
To purchase these cars at the current price, South Africans must be among the top 10% of earners.
This illustrates how exclusive it has gotten to purchase even the most affordable models from these high-end manufacturers, as 90% of the population makes less than this level.
The cost of cars has gone up dramatically in numerous categories during the past year.
Hatchbacks, which are often the cheapest cars from luxury brands, have had some of the biggest jumps, with prices rising by 7.6%.
Hybrids also increased by 4.6%, while SUVs and electric cars had smaller increases of 2.7% and 1.1%, respectively.
The Mercedes-Benz A-Class, BMW 1 Series, and Audi A1 demonstrate the extent of price increases.
The Audi A1 now costs R523,200, which is 18.6% more than its price of R441,000 in 2021. BMW’s 1 Series is now R713,395, a 29% increase from R553,220 in 2021.
The Mercedes-Benz A-Class has seen the biggest jump. It now costs R826,024, which is 41% more than the R585,960 price tag it had three years ago.
These increases are much higher than inflation, especially for BMW and Mercedes-Benz, which went far beyond the 20% inflation rate over the same period.
The long-term trends also paint a stark picture of escalating costs.
For instance, a Mercedes-Benz GLA200 that cost R400,000 in 2014 now costs R926,703, marking a staggering 131.4% increase in just 10 years.
There are several reasons for these price hikes.
One big reason is the weak South African rand, which makes importing cars and car parts more expensive.
The country’s slow economy has also played a role. On top of that, carmakers are adding new technology, like better safety features and high-tech systems, which raises manufacturing costs.
Additionally, South Africa has raised import duties and taxes on vehicles, making imported cars more expensive. This policy aims to protect local industries but results in higher prices for consumers.
Manufacturers have also incorporated more advanced safety features and technology into new models, which raises production costs and, consequently, retail prices.
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