Motus results point to strength in market

Motus CEO Osman Arbee says this is slightly better than industry projections that between 430 000 and 450 000 new vehicles will be sold in the 2021 calendar year compared to the 536 612 new vehicles sold pre-COVID-19 in 2019 and only 380 206 sales in 2020.

Arbee says this anticipated growth in sales will hopefully come from car rental companies starting to upfleet.

“We are hoping the market could pick up about 20 000 to 25 000 car sales from that sector by June next year, which will give us some growth as an industry into the 2022 financial year,” he says.

Arbee says Motus increased its overall vehicle unit sales by 10% to 228 633 vehicles in the year to June 2021 from 208 778 vehicles in the previous year. New vehicle unit sales grew by 6% and pre-owned vehicles by 13%, he says.

He says the group sells one in every five new vehicles sold in South Africa and maintained its market share in the year at 16.1%.

Arbee says Motus’s imported brands had done well, with Hyundai growing its market share from 7% to 7.7% and Kia from 3.4% to 3.7%.

He says it looks as if there had been a major decline in Renault’s market share from 5.6% to 4.2% but attributed this to selling 6 000 Renaults to the car rental industry in 2020 on the back of good support from Renault France.

Arbee says there were very few Renault sales to the car rental industry in the year to end-June but excellent sales through their dealerships.

He says new vehicle stock shortages caused by the global semiconductor shortage have also resulted in it becoming difficult to supply customers with the specific colour or specifications of their model of choice.

These constraints on the supply of new vehicles globally, and in South Africa, have in turn also caused a shortage of pre-owned vehicles, he says.

“It’s tough but we are managing, and dealerships have not started suffering losses because they don’t have vehicles. We are still continuing to sell new vehicles that we in stock and others that are being supplied, as well as pre-owned vehicles while the workshops and parts business are doing quite nicely as well,” he says.

Arbee says the shortage of pre-owned vehicles has resulted in them “selling at retail plus at the moment”.

“Nothing is selling at retail minus. So, whatever you see in trade values, book and trade, nobody is talking about book [values] anymore. Everybody is selling at trade plus.

“This will continue for a while until we get the supply of new vehicles back to normal, which we think could take up to another three months or so. If it’s a bit longer, by January we must get back to a new normal,” he says.

Arbee says Motus has delivered strong operating results in the year to end-June 2021 with fantastic cash flows with it as well.

He highlighted that in the year to end-June 2021, every important financial figure exceeded the expectations and is in excess of the group’s equivalent pre-COVID-19 number in the year to June 2019.

Motus reported a 78% improvement in operating profit to R3.795 billion in the year to June 2021 from R2.136 billion in 2020 and R3.62 billion in 2019.

Revenue increased by 19% to R87.2 billion from R73.4 billion in 2020 and R79.7 billion in 2019. Headline earnings per share grew by 298% to 1179 cents from 296 cents in 2020 and 1009 cents in 2019.

Arbee says Motus is committing to delivering stable operating financial results in the year to June 2022, but this is subject to there not being any further stringent COVID-19 lockdowns and the current vehicle inventory shortage not deteriorating.