Motus has “a big focus” on growing its aftermarket business over the next two years, says CEO Osman Arbee.
Speaking at the company’s annual results presentation in Johannesburg on Wednesday, he noted that the internal combustion engine (ICE) aftermarket still had “a lot of road to run”, despite the global move to electric vehicles (EVs).
The aftermarket business, in general, is also cash generative, asset-light once purchased, and not dependent on the sale of new vehicles.
Motus is active in the UK, Australian and South African vehicle retail, rental, import and aftermarket arenas.
Arbee noted that the changeover from ICE vehicles to EVs “won’t happen tomorrow”, especially as current ICE fleets would continue to run – requiring parts to do so.
South Africa has an ICE fleet of 12-million vehicles, the UK 35-million, and Australia 20-million.
“It is a big market still,” said Arbee.
He added that Motus expected the global supply of new vehicles to stabilise towards the middle of next year (calendar year), with the group’s South African importers – Hyundai, Renault, Kia and Mitsubishi – to finally have more stock available to customers.
Vehicle supply continues to be under pressure owing to a shortage of semi-conductors, as well as the impact of the war in the Ukraine.
Arbee also noted that the vehicle rental business was expected to stage a strong comeback towards Christmas and Easter, as the tourism sector started to stabilise after the worst of the Covid-19 pandemic.
Motus anticipated a 20 000-unit market boost from the rental sector in the next 12 months.
Arbee said the group’s own rental business was starting to return to normal, with its fleet at around 17 000 cars, up from 8 000 during the peak of Covid-19.
He expected a swing back to 25 000 units as the ultimate fleet-size, roughly 2 000 units short of pre-Covid numbers.
As for the used-car market, Arbee said the used-car price bubble had started to burst in July and August, with values now normalising following hefty hikes during the Covid-19 peak.
Motus saw a 17% drop in used-car sales from the 2021 financial year to the 2022 financial year, largely driven by muted flow-through from the rental car sector.
New-vehicle sales were up 13%.
Motus’ other numbers for the financial year ended June 30 were equally healthy, with revenue up 5%, to R92-billion, compared with the previous financial year, and operating profit up 31%, to R5-billion.
The group attributed the increase in operating profit to the recovery in the automotive and car rental sectors, coupled with increased margins owing to inventory shortages and disciplined cost management.