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| Review of operations – Bid Auto continued |
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| MOTOR RETAIL |
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| BMW/Mini (Forsdicks) |
| Growth in new vehicle sales proved challenging at our dealerships in Pinetown, Sandton and Tygervalley, though used-vehicle trading staged a recovery and pleasing results were achieved by aftersales. Tygervalley repair centre came into operation in July and the Tygervalley dealership began trading out of their new Mini facility in February 2007. |
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| General Motors |
| New vehicle sales were on target, but used vehicle sales were disappointing. Aftersales performance was strong. A McCarthy Call-a-Car Direct facility opened in Gezina and a large dealership will open early in the new period at Menlyn, Pretoria. It will carry the full GM range and is expected to boost our aftersales business. A new parts warehouse is nearing completion in Montana, Pretoria. |
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| Land Rover/Volvo |
| Land Rover performed exceptionally well, with outstanding Range Rover Sport and Discovery 3 sales and improved aftersales profits. The model line-up has been refreshed by the introduction of the all-new Freelander 2 and a new-look Defender. Intense competition in the premium passenger car segment inhibited Volvo sales growth. Our Parow Land Rover dealership has been relocated to N1 City. McCarthy Volvo in Pietermaritzburg was named most improved Volvo dealer of the year. |
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| DaimlerChrysler |
| Car-buying activity at Mercedes-Benz was affected by a pause ahead of the imminent launch of a new C class. Mercedes-Benz commercial vehicles did well. Sales of Chrysler, Jeep, Dodge and Mitsubishi were disrupted by new model introductions and vehicle shortages. The luxury used-car market remains challenging, though aftersales performance was positive. |
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| We have opened a new Mitsubishi dealership in Midrand. A Mercedes-Benz/Chrysler/Jeep/Dodge branch campus in Centurion is nearing completion and we have begun the development of a Mercedes-Benz lifestyle centre in Menlyn, Pretoria. An exciting development was the acquisition of Inyanga Motors which boasts two outlets in KwaZulu-Natal North (Empangeni and Vryheid). |
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| Nissan/Fiat/Alfa/Renault |
| Nissan SA recognised McCarthy Nissan Sandton as the best in its category and overall dealer of the year while McCarthy Nissan Germiston won the annual accolades for aftersales and service. Fiat and Alfa continued to grow and in 2008 will open a new parts distribution centre. Renault dealerships performed strongly and made good progress with aftersales. Our heavy commercial division was the star performer, with excellent sales and returns and won gold awards from Nissan Diesel SA in most categories. The performance of our two Renault dealerships is improving, with our outlet at The Glen (Johannesburg South) making particularly good progress. |
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| Peugeot |
| The Peugeot brand struggled to retain market share, though we managed to maintain a significant portion of the marque’s unit sales. Aftersales showed pleasing growth. Improved performance is expected in the coming year as the marque refocuses its marketing and representation. The launch of the new 308 should also have a positive effect. |
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| Toyota |
Trading profit and return on sales improved. Passenger vehicle sales were enhanced by the introduction of the Yaris T1 and the Avanza range while the launch of three Lexus models and the opening of our Kingsmead Lexus facility boosted Lexus sales tenfold. Commercial sales increased by 23,9%. Profits from used vehicles fell, but after-sales achieved strong growth as most vehicles are now covered by free service plans, resulting in high service customer retention.
Our Midrand Lexus and Tableview Toyota dealerships will open later this year. Further Toyota dealerships are planned for Gezina, Lynwood and Woodmead while another Lexus dealership is planned for Pretoria. McCarthy Toyota Trucks in Midrand was nominated as Toyota South Africa’s truck dealer of the year. |
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| Volkswagen/Audi/Seat |
Net profit before tax rose 39,0%. Increased used vehicle focus resulted in the sale of equal numbers of new and used units while both parts and service departments achieved combined growth of more than 41,3%. Relocation of our Prince’s Park dealership to Silver Lakes went well. We plan to open a specialist commercial dealership in Witbank in December following steady growth of the VW commercial range. We anticipate a challenging 2008 as no significant model launches are planned.
Our associate company, Autohaus Centurion, has undergone a major revamp with the separation of Audi and VW into two independent dealerships which comply with all corporate branding. In spite of this disruption, net profit before tax rose 10,3% and return on net assets was excellent at 169,0%. |
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| BURCHMORES |
| Burchmores increased profit before tax by 105,7% in a record year. Synergies with the McCarthy group and an increase in bank repossessions contributed to the good performance while our “Wholesale to the Public” concept ensured continual walk-through traffic. Unit sales rose 67,5%. We have invested in a new IT system and are positioned for another successful year. |
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