One of South Africa’s largest vehicle retailers, the McCarthy Motor Group, which forms part of Bidvest Group’s automotive division, recorded satisfactory results for the 2011 financial year, despite facing numerous industry pressures.

McCarthy, which celebrated its 100th anniversary in 2010, increased its revenue by 17.4% to R18.6-billion during the 2011 financial year. This was driven by a 22.1% increase in new-vehicle sales to nearly 36 300 units.

However, the group conceded in its 2011 annual report that trading conditions within the automotive sector remained difficult as a result of the many challenges facing the sector.

Bidvest notes that trading was highly competitive, with intense price-based competition having put motor retailing margins under pressure.

The earthquake and tsunami in Japan also negatively impacted on the supply of new vehicles and parts.

Further, the group notes that the introduction of the carbon dioxide emissions tax in 2010 and a dramatic increase in the perks tax on company vehicles, which came into effect in March, both led to a buying-down trend.

In addition, Bidvest says the introduction of the Gautrain from Johannesburg to Pretoria represents a risk, as it will reduce vehicle mileage and wear and tear, which will impact on the automotive industry’s service revenue.

Increasing fuel prices and the introduction of the e-tolling system in Gauteng are further concerns for the group, as these factors are expected to prompt a noticeable shift from vehicle ownership.

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