Management of the diversified group and South Africa's biggest vehicle importer, with interests in Australia and the UK, said yesterday in a trading statement that they hoped to maintain operating profit this year, in a challenging environment that was likely to persist in the medium term.
However, they aimed to grow normalised headline earnings per share, improve working capital efficiency and reduce debt compared with December 2018.
“The South African and global economic and political environments have been unsettled during the period,” the management said.
“The automotive market remains competitive and consumers continue to trade down with the shift to affordable vehicles from premium brand vehicles. Worldwide, the automotive industry is facing considerable change, with major disruptive trends likely to change the way vehicles are purchased, used and maintained in the medium to long term.”
In South Africa the total vehicle market performance declined by 2.4percent to 496512 units in the 11 months to end-May 2019, compared with the previous year.
Motus’ retail and rental operations were experiencing difficult trading conditions, partially offset by cost containment and the elimination of unprofitable dealerships.
Entry level vehicles and small SUV sales in the dealership channel had assisted the importer segment. The motor-related financial services segment remained stable.
The after-market parts business benefited from buying a controlling stake in Taiwanese wholesaler Arco in March last year.
In the UK, sales at the DAF commercial and Pentagon passenger dealerships remained profitable.
The Mercedes-Benz commercial dealerships were hurt by a restructuring, carbon emission issues resulting in a lack of inventory and lower truck and van sales.
In Australia, the SWT (Melbourne) dealerships purchased in October 2017 reported an improvement, while the Sydney business was negatively impacted by lower volumes due to the over exposure to certain brands.