Associated Motor Holdings (AMH) CEO Manny de Canha is set to retire in January 2018.

AMH imports brands such as Hyundai and Kia into South Africa.

The Imperial group announced last month that it had entered into an agreement to acquire De Canha’s 10% share of AMH Group, held through a holding company, in a deal valued at R750-million. Imperial currently has a 90% shareholding in AMH Group.

Once the transaction is concluded, AMH Group will become a wholly owned subsidiary of the JSE-listed Imperial group.

Apart from his position at AMH, De Canha is also an executive director of Imperial Holdings.

It is intented that De Canha should remain a director at Imperial.

The Imperial group has also announced a process of “planning” the “strategies, structures, systems and processes necessary to “enhance the value of Imperial’s total vehicle interests”.

This process is set to see a “staged implementation and realisation of benefits” as from July 1.

“It is important to stress that Imperial is fully committed to preserving the independence of the original-equipment manufacturers (OEMs, or vehicle manufacturers) and international brands for which we act as motor vehicle distributors and retailers,” notes Imperial.

“Any restructuring pursuant to this transaction will in no way infringe on our contractual commitments, compromise our obligations or test the valued relationships with the OEMs and brands that Imperial and its subsidiaries have developed over decades.”

AMH opened its doors in the 1990s, importing and selling vehicles. The company sold 600 cars in its first year of operation, increasing this number to around 70 000 units in 2011.

Over the last three years, AMH and Amalgamated Automobile Distributors (AAD, a small Chinese importer in which AMH holds shares) have seen their combined sales drop from 77 019 units in 2013 to 69 750 units in 2014, and 59 478 new vehicles in 2015.

Much of this decline has been the result of a weak domestic economy and a subsequent declining new-vehicle market. However, the weak rand has also forced vehicle importers to increase their prices above those of local manufacturers, leading to market share losses.

AMH was born in Australia, so to speak.

De Canha, who worked for Imperial, travelled to Australia in 1987, where his two-year stay extended to eight years.

During this time, he saw how the Button car plan, the informal name given to the Motor Industry Development Plan (MIDP) – which aimed to rationalise Australian automotive production and to improve the industry’s competitiveness – led to a rise in vehicle imports.

When a similar-looking MIDP was implemented in South Africa in 1995, De Canha correctly predicted increased imports as the main outcome of this policy move.

“Australia went from a fully locally produced market to one where 80% of the cars were imported,” he said in a 2011 interview with Engineering News. “I knew South Africa would also go the import route and, in 1996, I started AMH, with Imperial providing the backing.”

The MIDP has since been replaced with the Automotive Production and Development Programme, which works to reward large- volume production in South Africa.