CMH raises e-toll worriesComment on this story
Johannesburg - Combined Motor Holdings (CMH), the listed vehicle retailer, claims the “ill-conceived” billing system designed for the Gauteng e-toll roads is proving to be unworkable in a dealership environment.
Jebb McIntosh, CMH’s chief executive, said yesterday that accounts were received for vehicles long since sold and for road usage by used vehicles prior to them arriving at dealerships.
“This occurs, in part, because the toll system is linked to an already-flawed eNaTis system containing inaccurate vehicle ownership information. Attempts to have invoices redirected to correct owners are met with no response from an obviously overloaded Sanral billings department.
“I hope the inefficiencies highlighted since the opening of these toll roads will prompt a rethink by the appropriate authorities,” he said.
McIntosh said about R10 000 a month in e-toll bills was being racked up by each of the group’s 52 dealerships for vehicles they did not own.
McIntosh said the depreciation in the value of the rand had resulted in the price of some imported vehicle brands, including Land Rover, Kia and Hyundai, increasing by 14 percent so far this year.
He did not expect further price increases by these brands this year unless there was a further dramatic depreciation in the rand’s value.
Vehicle price increases across all the brands this year should average between 8 percent and 10 percent, he said.
McIntosh said the locally based original equipment manufacturers had raised vehicle prices by between 4 percent and 6 percent to date but further increases were expected.
McIntosh foresees some vehicle brand casualties in the domestic market in the current economic environment, particularly as there were about 60 vehicle brands in South Africa, making it one of the most competitive markets in the world.
He said it was very difficult for some brands to maintain sales volume to keep dealerships viable, even if they moved to a multi-franchise dealership mode “so inevitably some of those brands will go”.
McIntosh confirmed CMH was considering its future options in regard to the MG/Maxus range, particularly in light of the recent currency deterioration, but had not yet taken a decision.
He said CMH was unable to land the vehicle in the country at the right price, which resulted in the range producing disappointing results, both at importer/distributor and retail level.
Significant delays in the production of the new range of small- and higher-volume MG models had meant the business had not been able to cover overheads with the low volume of sales of the current product, McIntosh said.
The group also suffered losses in the year to February in its once profitable Peugeot dealerships and closed these four outlets but opened six new dealerships, comprising two Nissan dealerships and one each for Mitsubishi, Mahindra, Honda and Infinity.
The group sold about 19 000 new and 14 000 used vehicles in the year to February, which contributed to the 10 percent increase in group revenue to R10.8 billion from R9.8bn.
Operating profit increased by 10 percent to R320.2 million. The operating margin was maintained at 3 percent.
Headline earnings a share fell 1.3 percent to R1.57. A final dividend of 78c a share was declared, 28 percent higher than the 61c in the previous year.
McIntosh expects negative dealer vehicle sales growth in the year ahead and indicated the group’s strategy was to maintain the profit levels of the historically successful operations and to secure growth by eliminating the loss makers.
The shares rose 0.40 percent to R12.55 on the JSE yesterday. - Business Report