This division's results reflect strong strategic and operational achievements in a very challenging period. The previous rationalisation interventions and decisive expense action contributed significantly to the year's performance, which led to the team's focus on margin rather than volume, and which has yielded material benefit.
McCarthy retailed 1.1% more new vehicles and 7.2% more used vehicles. The ratio of used to new vehicles has improved to 1.2 used vehicles sold for every new vehicle.
There was a strong contribution from VW/Audi and Toyota in particular, but a shortage of new vehicle supply is constraining sales. The sourcing of quality used vehicles at the right price is becoming increasingly more challenging.
In terms of aftersales and parts, service throughput is at 86% of pre-COVID-19 levels, indicating that the market has yet to return to normality. Consequently, the demand for spare parts has also been lower.
Fleet sales remained depressed as clients hold back on major procurement decisions.
Bidvest Car Rental was sold, which is now owned by a Black consortium where former management are also shareholders.
The new Right-to-Repair concept which was introduced in July 2021, is viewed as an area of opportunity.
Looking forward
The supply chain remains a heightened risk in this division, given the global shortage of chips, new vehicle stock and automotive parts.
The division will be targeting a more balanced retail business, reassessing its mix of new and used sales/ passenger cars and commercial vehicles.
Interventions are underway to extract value from the greater adoption of the intelligent used car procurement system, and robot processing.
There is an enhanced focus on targeting fleet customers, including their aftermarket service requirements.
