McIntosh said two CMH dealers were affected by GM’s withdrawal, but the group would negotiate the continuation of its Opel and Isuzu franchises and the parts and servicing requirements of the remaining GM customer base.
“This will enable the dealerships to be restructured in an orderly fashion and remain profitable,” he said.
GM disinvested from South Africa last year and stopped manufacturing and selling Chevrolet in the domestic market, with its Struandale plant in Port Elizabeth sold to Isuzu Motors South Africa.
GM said the disinvestment was based on a global decision to earn the best return on investment and not local economic or political considerations.
McIntosh said CMH had reported a good set of results for the year to February despite the ongoing challenges presented by a difficult economic, trading and political environment.
He said the improvement was led by a strong performance by its core retail motor sector, but each operating segment contributed.
McIntosh said the retail motor sector was particularly sensitive to depressed consumer confidence, the effects of an economy that grew by only 1.3percent and suffered a downgrade by major credit ratings agencies, and a new vehicle sales market that increased by a mere 0.4percent.
“The financial year began under severe pressure as consumer and international investor confidence was shattered by the irrational and politically motivated decision to fire a respected finance minister. This created an extremely negative period, during which corporates in particular suspended capital goods purchases.
“State-capture allegations and endemic corruption and mismanagement at state-owned entities dominated the headlines, and it was only towards the end of the year, when a new political dispensation was forecast, that a semblance of positivity returned,” he said.
CMH yesterday reported a 17percent increase in headline earnings a share to 332.9cents in the year to February from 284.2c in the previous year.
Revenue grew by only 3.4percent to R10.57billion from R10.2bn.
McIntosh said revenue growth was restrained by limited vehicle price increases as manufacturers fought for market share and the continuing downward trend of sales within the luxury vehicle segment.
Operating profit rose by 15.5percent to R438.4million from R379.7m, with the operating margin improving to 4.2percent from 3.9percent.
Dividends a share for the year increased by 15percent to 161c from 140c.
McIntosh said the recent hikes in VAT, ad valorem duty and taxes on carbon emissions, which were all necessitated by government mismanagement of finances, would negatively affect the motor industry.
However, McIntosh was optimistic a new dawn had broken and modest economic recovery lay ahead, adding economists were predicting a 3percent to 5percent rise in new vehicle sales for this year, which would provide a welcome stimulus for the industry.
Shares in CMH remained unchanged yesterday on the JSE at R30.
- BUSINESS REPORT