IMPORT AND DISTRIBUTION
McCarthy Vehicle Imports (Chery and Foton)

A strategic review resulted in the disposal of 50% of the business to Imperial Holdings. Synergies through this joint venture will help us achieve acceptable returns. The deal includes the acquisition of import and distribution rights for the Foton pick-up and light duty truck.

McCarthy Heavy Equipment

In our third year, our national machine population has topped 200 units. We launched our materials handling division in January with operations in Johannesburg, Cape Town and Durban, and hope to secure import and distribution rights to the Nissan forklift and warehousing range and exclusive retail rights to Italian Fantuzzi products.

Yamaha distributors

The replacement parts and music divisions withstood rand weakness and the economic downturn relatively well, though the marine and motorcycle divisions proved less resilient. Several new models failed to achieve anticipated volumes.

The first phase of an IT upgrade was implemented, resulting in improved operational efficiency and business intelligence.

Consolidation of facilities and warehousing operations is a focus area for the coming year.

FINANCIAL SERVICES

McCarthy Insurance Services

The business achieved record profit growth off the back of strong annuity income and growth in the number of policies sold relative to new and used-vehicle sales. The investment of cash held to meet future claims cushioned some equity losses.

We are looking to widen our offering through niche products.

McCarthy Finance

The joint-venture was impacted by bad debt, low vehicle sales and interest rate margin squeeze. Bad debts seem to have stabilised, the quality of the book has improved and falling interest rates may soon prove positive.

Digitisation of finance processes is complete, enabling reallocation of some internal resources and efficiency gains. Further reduction of bad debt is a priority.

McCarthy Fleet Solutions

The results from the leasing and fleet management division exceeded expectations. McCarthy Fleet Solutions enjoyed fleet growth and exceeded all financial targets, though bad debt showed a minimal increase.

Migration of recently acquired Viamax businesses onto a common fleet management system has been completed.

Car and Van Rental

The Budget Car and Van Rental brand celebrated its 40th year in South Africa by introducing new products such as Budget Purchase Plus, Budget Service Plus, Wings ’n Wheels and Budget Abroad. Budget SA received an award for marketing innovation and one linked to the Budget Abroad programme.

Budget gained market share, improved expense management and retained third spot at state airports. We are investing in infrastructure and investigating the implementation of an internet booking engine and IT links to customers to enable better debtors’ book management.

SUPPORT SERVICES
McCarthy Call-a-Car

McCarthy Call-a-Car continued to be a dominant player in the online motor retail space and proved itself a reliable source of quality leads for McCarthy dealerships. We recorded sales of 6 657 units.

Club McCarthy

Club McCarthy’s focus was to retain customer-membership through renewal campaigns. We had 131 877 members at year-end.

Corporate marketing

The interface between large nationally based corporate fleets and the dealer network ensured continued support for McCarthy.

Eliance

We implemented our Automotive system successfully at 227 Toyota dealerships. A number of Nissan dealers were signed up as well as 15 independent dealers.

Infrastructure is being developed to enable us to market our product suite internationally. Focus areas include multi-language and multi-currency support.

McCarthy ICT

Information and communications technology costs were cut by 9% through negotiated savings with current suppliers and the appointment of new ones. New technologies were deployed to reduce cost and improve efficiency.

Parts division

Sales turnover targets were exceeded and new accounts secured are “locked in” through value-added offerings. Cross-franchise synergies were expanded and a parts cadet programme launched. The owner-driver enterprise development initiative proved a success in Gauteng and will be extended to KwaZulu-Natal and Cape Town.

Aftersales service

Focused attention on aftersales led to increased workshop productivity and efficiency. Our objective is even higher levels of customer retention through improved technical and interpersonal service.