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Korean cars are growing in terms of stature, quality and appeal. However South African motorists still prefer Japanese vehicles.
This much has emerged after analysing the resale values of Korean versus Japanese cars, reports True Price.
Darryl Jacobson, managing director of True Price, explains that the company undertook an extensive analysis of all Japanese and Korean cars on its system (bakkies and commercial vehicles were excluded, in fairness to the Korean contenders).
Jacobson said: "We analysed all the vehicles in four odometer categories: 0 to 50 000 km completed, 50 000 to 100 000 km completed, 100 000 to 200 000 km completed and over 200 000 km completed. In three categories, the Japanese vehicles came up trumps."
In the 0 to 50 000 km, Japanese cars achieve 70.3% of their original list price when sold on auction. Korean vehicles, on the other hand, achieve 68.9%. In the 50 000 to 100 000 km category, Japanese vehicles achieve 60.0% while the Korean cars get 59.3%.
In the 100 000 to 200 000 km category (the only sector in which the Koreans triumph), Japanese vehicles notch up 49.2% – compared to the Koreans at 49.3%. In the over 200 000 km category, the Japanese record 43.2% while the Koreans achieve 38.8%.
Jacobson says that more mature buyers are probably giving the Japanese cars the edge when it comes to resale values.
He said: "The Koreans have actually been producing cars since 1955. The very first Korean car – the Sibal – was produced back then. It was based on the Willys Jeep and it was mostly used as a taxi. Brands such as Hyundai commenced production in Korea back in 1967. However, it was only in April 2000 that the company entered the South African market. On the other hand, Toyota started producing vehicles in South Africa back in June 1962. It follows, therefore, that older buyers are more comfortable with Japanese products – because they have known them and have been driving them for many decades."
The history lesson aside, what does the slightly better resale value of the Japanese brands mean to motorists? Jacobson says that there are some clear messages to emerge from this study.
"Right now, if you’re undecided as to whether to purchase a new Japanese or a Korean vehicle, the safer bet (when considering resale values) would be a Japanese product. Chances are good that the vehicle won’t depreciate as much as the equivalent Korean product," he advises.
On the other hand, a Korean vehicle will probably represent slightly better value for money if you’re in the market for a used car. "This is because it will have depreciated more than its Japanese counterpart," explains Jacobson.
True Price says it will repeat this exercise in a few years.
Jacobson concludes: "It will be fascinating to see if the trends change. I think that they will. Customer confidence in Korean brands is rising. Had we done this exercise 10 years ago, the Koreans would not have come close to recording these resale figures (which are now very commendable). I have no doubt that their resale values will further improve. Who knows? Maybe in two or three years’ time, the Koreans will be king? It’s going to be very interesting to see!” Jacobson concludes.