Motus’ total vehicle market performance in South Africa declined by 2.4% in the 11 months to May 31, with 496 512 units sold, compared with the 508 785 units sold in the 11 months to May 31, 2018, with the country’s and global economic and political environments having been unsettled during the period.
The group reported in a voluntary pre-closed-period trading update, on Wednesday, that low economic growth, a weak currency and high unemployment had negatively impacted on disposable income, consumer spending and vehicle affordability.
Motus’ Retail and Rental operations were experiencing difficult trading conditions but these were partially offset by cost containment and the elimination of unprofitable dealerships.
Entry level vehicle and small sports-utility vehicle sales in the dealership channel had assisted the Importer segment; while the Motor-Related Financial Services segment remained stable.
The Aftermarket Parts business had been enhanced by the acquisition of a controlling shareholding in Taiwanese wholesaler, Arco.
The centralised Finance and Insurance business across the dealer network, which executes group financial services strategies, provided economies of scale and a competitive advantage for the business.
UK AND AUSTRALIA
Motus’ UK operation had been impacted on by the political uncertainty arising from Brexit.
However, despite the negative impact of Brexit on vehicle sales, the DAF commercial and Pentagon passenger dealerships remained profitable.
The Mercedes commercial dealerships had been negatively impacted by a one-off restructuring of the business, carbon emission issues resulting in a lack of inventory availability and lower truck and van sales, resulting in a reduction of variable margin earned.
Senior management changes were introduced to improve systems and the future profitability of the Mercedes commercial operations.
Meanwhile, the Australian economic environment remains competitive and Motus’ SWT dealerships, in Melbourne, recorded an improvement, while the Sydney business was negatively impacted on by lower volumes owing to an overexposure to certain brands that performed below expectations in the market.