Automotive

“We continually harness new
technology to ensure convenience,
save time and add value.”

STATURE

Bidvest McCarthy is one of South Africa’s largest motor retailers while Bidvest Car Rental is a major player in its sector. This status was unaffected by corporate change.

In many instances, Bidvest McCarthy is the largest South African retailer of the brands it represents. We are the largest VW, Audi and Mercedes retailers and second largest Toyota and Nissan retailers.

Burchmores, our auctioneering business, is today the country’s biggest vehicle remarketing company.

Reputational stature is also substantial. Our marketing, sales and service expertise is recognised by leading OEMs and we are training leaders in our industry.

MANAGEMENT

Decentralisation encourages entrepreneurial flair. Local ideas quickly translate into local action. This contributes to trading flexibility and a can-do mindset across management teams.

Strong emphasis on people development builds self-confidence and ensures speedy decision making. Our managers and people do not rely on a procedures manual, they rely on themselves.

VISION AND INNOVATION

We sell superior customer experiences. The promise of exceptional service includes all customer interaction in every area of the business and across all formats – whether on the showroom floor or in the digital domain. A project refining the customer experience in the car rental industry was initiated during the year. This project, utilising state-of-the-art technology, will be launched early in the new financial year.

We continually harness new technology to ensure convenience, save time and add value. A philosophy of continuous enhancement drives the business and supports the vision of customer-centred service delivery.

NEW FOCUS

Service focus is not new, but warrants renewed emphasis in a difficult economy.

The 2016 rebranding of Bidvest McCarthy facilitated this process as the customer is at the heart of the strategy and is central to the new Bidvest McCarthy brand promise: We deliver. Always.

Intensified customer focus in 2016 contributed to resilient performance.

TRANSFORMATION

Transformation represents a strategic opportunity.

We are entrenching our position in the retail and fleet market segments by constantly evolving our business to reflect the society we serve.

Partnerships with black entrepreneurs and suppliers have become a key focus.

Bidvest Automotive has valuable experience in this area. The business is an industry pioneer of enterprise development and the incubation of a new generation of black entrepreneurs, primarily via owner-driver schemes. In 2016, sustained support of these initiatives secured full points across the enterprise development category of the B-BBEE scorecard.

Investment in people is maintained no matter what the trading environment. Skills development spend rose to R145 million (2015: R135 million). Management development is a focus area and the executive team is being enlisted into a mentorship programme to develop black talent.

CONTINUITY

Our successful transition from a centralised to a decentralised business ensured zero disruption following the unbundling of the Group’s foodservice interests.

The Bidvest philosophy of personal accountability has been strongly communicated over recent years. Lean structures, self-reliance and an entrepreneurial mindset are key features of the Bidvest Automotive landscape.

Bidvest culture complements the 100-year-old McCarthy heritage with its emphasis on family values.

INDUSTRY CONTEXT

A no-growth economy, rising prices and rigorous credit extension criteria put acute pressure on the new car market. Luxury brands were hard hit. New vehicle dealer sales industry-wide have fallen 11% in 2016 to date.

KEY FEATURES

  • The overall results obscured relatively strong performance in the face of industry contraction.
  • Revenue was R24,1 billion (2015: R23,7 billion). Trading profit of R675 million was recorded (2015: R732 million).
  • The business benefited from the full-year effect of Car Rental’s divisional reintegration.
  • Bidvest McCarthy Call-a-Car software was rewritten to ensure full transactional capability via the web or mobile device. Customers can place an order while applying for finance and insurance. The platform was relaunched as McCarthy.co.za.
  • The online staff training portal iFunda was further refined and enhanced.
    • Contribution to Group
    trading profit
    12%
  • An in-house app was rolled out enabling the scanning of VIN plates and barcodes, allowing staff to conduct electronic stock counts. Time savings are considerable.
  • CRM systems were enhanced to overlay a Golden Record Programme on existing data, creating a single, consolidated record of all interactions with customers and enabling personal treatment regardless which franchise an existing customer migrates to.
  • Ford/Land Rover put in an exceptional performance and Toyota had a good year, bolstered by the Hilux and Fortuner launches.
  • VW dealerships put in a creditable performance relative to industry peers.
  • New vehicle sales reached 35 859 units (2015: 37 840).
  • Used vehicle teams put in a strong second-half performance. Annual retail sales reached 39 360 units (2015: 39 190).
  • Burchmores had a good year, optimising marketing opportunities as repossessions rose.
  • The parts and service departments achieved good growth.
  • Alliances were concluded with all major “wheels-banks”.
  • Dealer of the Year awards were received from four manufacturers and two dealer group awards were won.

YEAR AHEAD

Trading conditions will remain difficult and may deteriorate. 2017 is expected to be the year of the used car in view of new vehicle price rises and customer belt-tightening.

The division is well placed to outperform its industry through its rationalised network, enhanced systems and continuing synergies between car rental and motor retailing.

Divisional support services will relocate early in 2017. The corporate team now comprises just seven team members.