Exclusive importer and distributor in South Africa
* Market share of passenger and light commercial vehicles only.
Exclusive distributor in Rest of Africa
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Hyundai
in four countries |
Kia
in four countries |
Renault
in four countries |
Mitsubishi
in eight countries |
Nissan
in four countries |
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| Botswana, Lesotho, Namibia and Swaziland |
Lesotho, Namibia, Swaziland and Zimbabwe |
Botswana,
Lesotho, Namibia
and Swaziland |
Botswana, Lesotho, Malawi, Mozambique, Namibia,
Swaziland, Zambia, Zimbabwe |
Kenya, Malawi,
Tanzania and Zambia |
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We continue to provide leading-edge mobility solutions at competitive prices.
2020 performance
Market leadership
The quality of our relationships with our customers depends on our ability to provide exceptional service, innovative and accessible products and services. We aim to consistently exceed their expectations to deepen customer loyalty and our ability to generate revenue income from sources other than just the vehicle sale. We continue to provide leading-edge mobility solutions at competitive prices through ongoing innovation. We also apply stringent quality and safety measures to ensure we deliver quality products and services.
We have longstanding distributor relationships with OEMs, providing market access through quality marketing, high levels of customer satisfaction and strategically located dealerships in growing urban areas. We have regular engagements with them at senior levels. Besides targeted volumes, customer satisfaction scores are critical elements of our agreements with OEMs.
Our ability to meet OEM targets allows us to remain the OEMs dealer of choice, which enables us to leverage better pricing on vehicles, and provide service and parts at competitive prices to customers. Our importer brands are highly reliable and the model variety we offer allows us to take advantage of the consumer trend of buying down to more affordable vehicles, favouring our entry level vehicles, and small and medium-sized SUVs offering.
We partner with OEMs to develop new ways of penetrating the market and to realign route-to-market channels to match evolving customer expectations, and work with them to ensure that we continue to offer the most relevant and competitive products for the medium term.
We received OEM assistance to mitigate the negative impact of COVID-19 through targeted reductions and variable margin pay-outs, extension of floorplans, demonstrator vehicle relief, staff training suspension and the cancellation of accepted vehicle orders. OEMs have also provided sufficient parts inventory to ensure we can continue to service customer vehicles.
We continue to monitor the ongoing impact of COVID-19 and have sufficient well-priced stock of vehicles and parts. We do not anticipate supply chain disruptions as the OEMs and parts suppliers have commenced operations in the countries in which they operate.
Hyundai and Kia have forward cover on the Euro and US Dollar to March 2021 respectively, at average rates of R16,80 to the Euro and R15,70 to the US Dollar. As agreed between the shareholders, Renault does not take forward cover on committed orders, however, Renault France shares in 50% of the net foreign currency movements between costing and payments rates. With the exception of Renault, the current guideline is to cover seven to nine months of forecast orders.
We will rationalise our dealership footprint in response to the contraction of the new vehicle market and refine the implementation of a multi-franchise model in dealership locations where this is appropriate. Our ability to enhance customer experience across the vehicle ownership cycle will remain critical to maintaining and growing our market share as we continue to adjust our operations to this new operating environment while maintaining our high standards for service excellence.
Integration and optimisation
Our ability to leverage opportunities for digitisation and innovation that drive communication throughout the ownership cycle and reward customer loyalty has become a key focus, and we will continue to develop our initiatives and accelerate innovation while conservatively managing costs and inventory levels.
We continue to create a fully integrated distribution and retail business with scale and are working on driving consistency across our dealerships to instil the right behaviours and disciplines for success. This includes implementing standard processes across dealerships, and centralised marketing to ensure consistent brand messaging while benefitting from lower advertising costs. A newly developed IT vehicle bond store and logistics management solution will be fully deployed by end of 2020.
We continue to develop value-added initiatives that include building an e-commerce online buying platform and introducing efficiencies like electronic financing capabilities into our showrooms, to improve our customer experience. We are exploring the benefits of using data analytics to track consumer trends to improve our understanding and develop our responses to maximise related opportunities.
Read more about the Group’s approach to innovation and technology
Our people
Our people are critical to the success of our business and we continue to consider their safety and wellbeing our top priority during COVID-19. We have adapted how we manage our operations in this new working environment, ensuring that we have a safe workplace for our people who have returned to work, including sanitising all premises, issuing face masks, sanitisers and practising social distancing.
Our culture of high performance and innovation is supported by ongoing improvements in our ability to provide effective and relevant training, job support and career development that improves employee engagement.
Read more about the Group’s people strategy
2020 financial performance
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| Revenue (Rm) |
10 158 |
4 |
7 253 |
(21) |
17 411 |
18 949 |
(8) |
| Operating profit (Rm) |
430 |
11 |
397 |
(6) |
827 |
810 |
2 |
| Operating margin (%) |
4,2 |
| 5,5 |
| 4,7 |
4,3 |
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| ^ |
HY1 numbers are unaudited and were released in the interim published results for the six months ended 31 December 2019. |
| * |
HY2 numbers are unaudited and derived from deducting the HY1 results from the full year published results of 30 June 2020. |
Revenue declined by 8% in line with the decline in sales volumes and the change in the mix of vehicles sold offset by vehicle inflation. The Import and Distribution segment retailed 35 402 units (2019: 38 172) during the year. The volume declines are attributable to COVID-19, which resulted in severe vehicle market contraction.
Operating profit improved by 2% for the year mainly due to the higher gross profit margins as a result of favourable forward exchange rates, competitive pricing and cost containment.
Our controllable market share (passenger and LCVs) in South Africa at June 2020 is 16,3% (June 2019: 15,1%) with the overall vehicle market contracting by 18,6%. Hyundai achieved 7,0% market share (2019: 6,6%), Kia achieved 3,4% market share (2019: 3,0%), Renault achieved 5,6% market share (2019: 5,0%) and Mitsubishi achieved 0,3% (2019: 0,4%).
