Chinese pressure forces big changes at South Africa’s largest car dealer

South Africa’s largest car dealer is widening the range of brands it offers to ramp up revenues, as the country’s motor industry is reshaped by rising competition from Asia.

Motus Retail, a unit of Motus is expanding its portfolio to include Haval, Honda, Suzuki, Tata and Mahindra to capture a larger share of a market that has been upended by the explosive growth of new car makers, most notably from China.

“We learn, we debate, and then when we are in a position to, we leverage our routes to market solutions to secure the right emerging brands,” Motus South Africa Retail CEO Gideon Jansen van Rensburg said in an interview.

The company, which has around 20% of the South African new passenger car market, represents 38 brands via over 300 dealerships.

Rising costs and slower revenue growth prompted it to retrench 67 staff last year, with top managers taking a pay cut of as much as 30%.

Chinese manufacturers have moved from being a marginal market presence in 2019 to top-tier competitors, according to data from South Africa’s Automotive Business Council, with sales turbocharged by a combination of affordability, competitive quality and design.

Chery, one of China’s biggest vehicle manufacturers whose brands includes Chery, Jetour, Omoda and Jaecoo, is now ranked the third biggest seller in South Africa, relegating Volkswagen to fourth place.

Motus wants to tap shifts in consumer preferences away from legacy brands like BMW, Mercedes-Benz, VW and Toyota toward the newer manufacturers, which offer cars with the latest technology at a fraction of the price of their old-line rivals.

“You have to make sure we are well represented in the new emerging market,” Van Rensburg said.

“But also bearing in mind that we have legacy brands that are doing very well, and we have to make sure our dealerships are right-sized to adapt.”

The company has acquired the Penta Menlyn dealership in Pretoria, the capital, which has the Suzuki, Chery, Omoda and Jaecoo brands on site.

The group has also secured its first dealership with India’s Mahindra & Mahindra and is deepening its ties with China’s GWM including a recent acquisition of a third Haval dealership in George in the Western Cape.

“We are talking to other stakeholders about increasing our foothold in emerging brands,” he said. “We want to be diversified across all the brands that we can represent.”