Cultural factors
McCarthy celebrates its
100th anniversary in 2010
and has a well-defined
value system. Adherence
to shared values is measured
annually. In 2008, 10 years
after the introduction
of a survey, we saw the
first slight fall in our
ability to live our shared
values – a predictable
result in view of the scale
of recent acquisitions
and the pace of growth.
Our vales are: mutual
trust and respect; ethical
dealings; openness and
sincerity; participation;
empowerment; teamwork and
excellence in putting the
customer first. The strength
of the culture is reflected
in the level of commitment
to the company and the
long-term loyalty of our
people.
The future
An increasingly difficult
trading environment is
anticipated. New vehicle
sales are not expected
to recover until the final
quarter of calendar 2009
as interest rates are projected
to remain high and the
clamp on consumer credit
will not be relaxed to
any material extent.
Expense savings and working
capital management will
continue to receive priority.
Bid Auto will simultaneously
pursue further growth in
parts and service business
while seeking continued
expansion of used-vehicle
sales. Product innovation
by Financial Services will
support the value proposition
as maintenance plans can
be linked to an already
consumerfriendly used-vehicle
package.
Judicious growth of our
national footprint in support
of major automotive brands
is planned. Two new Ford
Mazda dealerships will
be opened while five outlets
will support the return
of Suzuki to the South
African market.
A network of independent
dealerships is in development
to broaden the geographic
reach of the brands we
import from China. These
franchise operations will
be opened in small and
medium-size towns and other
areas that have not been
previously served by the
McCarthy brand.
Further synergies and
efficiencies will be exploited
by McCarthy Fleet Solutions.
It is anticipated that
the business will soon
begin to benefit from Transnet
fleet renewals. In addition,
our ValueServe outlets
will enjoy increased service
volumes driven by national
fleet contracts and the
ageing vehicle population.
Corrective action will
be taken at loss-making
operations.
The intention is to match
2008 levels of revenue
and trading profit, despite
a continued slump in new
vehicle sales and extremely
challenging trading conditions.
McCARTHY MOTOR HOLDINGS
BMW/Mini (Forsdicks)
Trading conditions were
extremely difficult, with
depressed sales and margin
erosion putting huge pressure
on profitability.
The ray of light came
from our Approved Repair
Centres (accident repairs)
where the Tygervalley operation
produced sterling results
with a 130% profitability
improvement while our operation
in Linbro Business Park
(Sandton) made a full turnaround
from loss to profit.
Our Sandton, Tygervalley
and Pinetown dealerships
made modest but respectable
profits and aftersales
departments recorded improved
results.
There were no acquisitions
or disposals and no major
capital expenditure projects
were undertaken.
General Motors
We opened our new state-of-the-art
dealership in Menlyn, Pretoria,
housing the Chevrolet,
Isuzu and Premium Brand
franchises. As part of
the dealer rationalisation
programme of General Motors
SA, we closed our Pretoria
dealership.
The Chevrolet and Isuzu
brands performed well,
though models across the
Premium Brands channel,
including Cadillac, Hummer
and Saab, found the market
increasingly challenging.
The new parts warehouse
in Montana is performing
well. Aftersales continues
to be a strength.
Land Rover/Volvo/Ford/Mazda
The Land Rover brand remains
strong and the aftersales
area of the business is
growing in strength. But
trading conditions became
increasingly difficult
for premium brands.
The Volvo model range
may not be refreshed for
some time and the brand
came under such intense
pressure that the viability
of our Volvo dealerships
is threatened.
McCarthy’s imminent re-entry
into Ford and Mazda via
new dealerships in Pretoria
East (Silver Lakes) and
the south of Johannesburg
(The Glen) is significant
as it affords an additional
channel into the market’s
high-volume passenger and
light commercial segment.
The model line-ups include
the Mazda2, voted South
Africa’s Car of the Year
and World Car of the Year.
Our new dealerships become
operational during the
2009 financial year.
Mercedes-Benz/Chrysler/Jeep/Dodge/Mitsubishi
There were several successful
model introductions, but
the highlight was the arrival
of the new C Class Mercedes-Benz.
Sales have been very pleasing.
Demand for commercial
vehicles rose and our Witbank
commercial vehicle business
delivered outstanding results.
We opened a new Mercedes-Benz
dealership in Centurion
and a Lifestyle Centre
in Menlyn. The Lifestyle
Centre puts McCarthy at
the forefront of dealer
facilities. With the opening
of the Lifestyle Centre,
we closed two other Mercedes-Benz
dealerships in Pretoria.
A multi-brand dealership
opened in Vryheid.
The fortunes of the DaimlerChrysler
brand have been steadily
improving and we opened
a new dealership for Chrysler,
Jeep and Dodge in Centurion.
The performance of our
Mitsubishi outlets was
disappointing, mainly as
a result of a limited launch
of the new Triton bakkie.
Later this year, the model
range will be completed
and we expect a significant
improvement.
