Divisional reviewsTrading and distributionAutomotive

Management’s focus on margin rather than volume and continued attention to improving efficiencies has been beneficial, resulting in an all-time divisional high trading profit. A ROFE of 50% is unprecedented aided by the short supply of vehicles.

The availability of new vehicles across the dealer network continues to be erratic with global vehicle supply, componentry and parts still a challenge. The KwaZulu-Natal floods further hampered supply. Despite this, new vehicle sales still increased 8.6% and Bidvest McCarthy’s market share increased. Fleet sales are yet to recover to pre-pandemic levels.

Demand for used vehicles was strong, as competition in this sector has been heightened, placing pressure on the franchised dealer network to secure good quality, well-priced used vehicles. In total 9.6% fewer used vehicle were retailed during the financial year.

South African national dealer market brand sales continue to demonstrate the trend of shifting away from luxury vehicles to the more traditional volume brands. Toyota has maintained market share notwithstanding the damage to its Kwazulu-Natal facility, which is indicative of its brand strength.

Aftermarket activity improved as the year progressed, and as traffic volumes increased, but recently showed signs of plateauing. Efficiency levels are good, and the focus on costs has been increased.

It is pleasing that Bidvest McCarthy brands have won numerous industry and OEM awards over the past year.

Looking forward

Consumer disposable income pressure has become more noticeable, with lower bank credit approval rates being granted. This is being carefully monitored for its effect on future sales.

The supply of new vehicles has started showing early signs of improvement.

The discipline of targeting good margin sales will continue, and strategies to grow the contribution from used vehicles explored.

Strategically, there are opportunities being assessed to diversify this divisions offering which, if implemented, may be beneficial in the longer term.