Vehicles - Vehicle Import, Distribution and Dealerships

The division will seek to defend and sustainably grow market share of its directly imported vehicle brands. The shift in buying behaviour to entry-level brands – a number of which are exclusively represented by the division – is expected to contribute positively to market share. In partnership with manufacturers, the division has introduced further incentives such as extensions of manufacturer warranty periods and maintenance plans on key brands to increase the desirability of brands under current market conditions.

The division actively manages its exposure to currency volatility. Sudden and severe exchange rate impacts are mitigated by maintaining hedging strategies together with longer-term forward cover and approved option hedging products. Sustained rand weakness has necessitated increases to vehicle selling prices, partially offset by preferential prices negotiated with manufacturers of its imported brands. As new vehicle trade in Africa is predominantly in US dollars, the division’s exposure to currency shortages in countries north of South Africa is minimal.

The greater use of digital platforms by both buyers and sellers requires the division to adapt its sales approach and invest in relevant technologies. Its digital strategy includes introducing new interactive online platforms to facilitate sales, with the potential of expanding these platforms into its African operations over time.

To grow its presence in Africa, the division is considering opportunities in right-hand drive markets beyond its existing footprint of six African countries (excluding South Africa) and will look to introduce other vehicle brands into existing markets. In Australia, the introduction of new brands and the successful conversion of dealerships into multi-franchise dealerships is contributing positively to performance.

The division disposed of various non-core operations during the year and will continue to evaluate its portfolio of businesses to focus on its core importer, distribution and retail operations. Further opportunities for simplifying the business and reducing costs will be identified as part of the consolidation of Motus Holdings, with an initial focus on back-office and administrative functions.

Other simplification and cost-reduction initiatives include reassessing the division’s dealer network to become more asset-light. This includes exploring opportunities to consolidate brands under multi-franchised dealerships and introducing sales-focused dealerships in prime locations, with vehicle maintenance and administrative functions housed in lower-cost areas serving multiple dealerships. The disposal of non-strategic properties will realise significant value for the division; however, properties considered strategic from a customer visibility and OEM relationship perspective will be retained.

REVENUE 2016
R million
2015
R million
%
change
Vehicle Import, Distribution and Dealerships 28 473 27 437 4

OPERATING PROFIT 2016
R million
2015
R million
%
change
Vehicle Import, Distribution and Dealerships 1 149 960 20

OPERATING MARGIN 2016
%
2015
%
Vehicle Import, Distribution and Dealerships 4,0 3,5