This Week In The News

NEWS IN SHORT

• Good news for Shein and Temu shoppers in South Africa. The South African Revenue Service (SARS) has decided to hold off on applying a 45% import tariff on clothing products – for now.
  
  
• Mitsubishi is getting into bed with Honda and Nissan. The partnership will span joint work on software development, batteries and other electric-vehicle components, as well as EV charging and energy services, the three companies said.
  
  
• South Africa’s up-and-coming new petrol retailer. The Caltex service stations that local motorists are familiar with are being converted to new sites under the banner of Astron Energy.
  
  
• R2.38 drop in petrol price. South African motorists have experienced three consecutive months of petrol price cuts, almost reverting back to the prices at the start of the year by dropping an accumulative R2.38 since May.

• The Consumer Goods and Services Ombudsman (CGSO) has warned that South Africa’s legislative framework around e-commerce is lacking and does not provide adequate protection for consumers.

• Watch new Prado podcast: https://www.citizen.co.za/motoring/new-prado-toyota-land-cruiser-podcast/

• Civil rights organization AfriForum has spent over R1.5 million in 2024 thus far on repairing potholes across South Africa’s tattered roads.

• OUTsurance says that as a general rule, it doesn’t consider expired licenses a valid reason to reject a claim, particularly where there is no materiality to the loss

• Markets: The rand gained on Wednesday as a rebound in global stock markets boosted risk sentiment. On Thursday (8 August), the rand was trading at R18.35 to the dollar, R23.31 to the pound, and R20.04 to the euro. Oil is trading at $78.36 a barrel. [Reuters]

 

From the Members stand

When posting a vehicle for sale online, it's generally advisable to avoid including the license plate in the photos. Here’s a recent incident that highlights why:

One of our members experienced an issue this week. He had posted an advertisement for a white Mercedes online, but unfortunately, the license plate was visible in the photos. On Monday morning, he was visited by three SAPS officers who identified themselves as being from Mpumalanga. They were investigating a hit-and-run case involving a white Mercedes with the same license plate number displayed in his photo.

The member immediately contacted his local SAPS Flash unit, who came to verify the officers' identities. Fortunately, the officers were legitimate, and it turned out that the vehicle involved in the hit-and-run was a different model than the one he had listed for sale.

Key takeaways from this experience:
• Remove license plates from stock photos to avoid confusion and potential legal issues.
• SAPS should contact your local SAPS before extending their inquiries outside their jurisdiction.

By taking these precautions, you can help prevent similar issues and ensure a smoother selling process.
(Thanks Laurence – Riverside Cars)

 

Massive own-goal for South Africa – costing thousands of jobs and R100 billion

At the end of July 2024, TotalEnergies announced its exit from its discoveries of gas condensate off the tip of South Africa.

Portfolio Committee member on Mineral and Petroleum Resources James Lorimer speculated that a possible reason for the exit of TotalEnergies had to do with sentiment around PetroSA and recent reports about its contracts.

This was detailed in an exposé by investigative reporters at amaBhungane, where it looked at companies that were awarded a R21 billion contract to refurbish the Mossgas plant.

Half of the contract was awarded to a Russian group, while the other half went to a company that had already been liquidated because it was unable to pay a relatively small amount owed.
PetroSA offered no comment when these contracts were queried by amaBhungane. However, Lorimer said it posed a clear problem.

“A company that receives a multi-billion-rand contract gets liquidated for not paying a couple of R100,000 in salaries is a clear problem,” said Lorimer.

Lorimer said that the optics surrounding these contracts may have influenced the petroleum giant’s decision to move on.

 

The average cost of a new car in South Africa in 2024

The average value of vehicle finance in the first quarter of 2024 in South Africa is R391,000, and at this price point, you can buy roughly 21 cars.

The skyrocketing prices of new cars have made it difficult for the average South African to afford a new vehicle, with less than a quarter of all car models priced under R500,000.

It is estimated that there are currently 1,481 car models for sale in the country. Of these models, 1,082 now cost over R500,000, representing almost 75% of the new car market – meaning only 25% are priced under the half-a-million-rand mark.

As of July 2024, no new cars are available for under R180,000, with the sole exception being Suzuki’s S-Presso priced at R178,900 — a situation not seen a few years ago.

 

The hidden ‘luxury’ tax South Africans pay on all cars over R250,000

South Africa’s “luxury goods” tax, which applies to cars over R250,000 and has remained unchanged for almost 30 years, is increasing the high cost of vehicles in the country.

One of these taxes, while only a small part of the taxes imposed on imported vehicles, is the Ad Valorem Luxury Tax.

Surprisingly, this ‘luxury tax’ has not been revised for nearly three decades.

This means South Africans are still paying this tax on all cars over R250,000. Thirty years ago, cars over R250,000 could afford luxury brands such as Jaguar, Porsche, and more.

Under the current ad valorem tax, a Kia Picanto (starting at R260,995) is considered a “luxury” vehicle.
The maximum ad valorem tax that can be applied is 30%. At the moment, any vehicle imported above the price of R250,000 will have at least 5.25% added, which equates to a tax of R13,125.