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Africa|Automotive|Business|Financial|Rental|Service|Tourism|Equipment
Africa|Automotive|Business|Financial|Rental|Service|Tourism|Equipment
africa|automotive|business|financial|rental|service|tourism|equipment

New-vehicle supply constraints could ease towards year-end – Motus

17th September 2021

By: Irma Venter

Creamer Media Senior Deputy Editor

     

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Automotive group Motus expects new-vehicle supply, currently constrained by a global computer chip shortage, to start normalising towards the end of the year, says CEO Osman Arbee.

“Yes, there are some constraints with the supply of new vehicles globally, not only in South Africa. There are shortages, but they are not so bad that we are closing our dealerships or that they have turned into loss[making] situations.

“We are continuing to sell new vehicles that are being supplied. There is enough stock to keep us going. We also have preowned vehicles, workshops and parts. So, overall, we are okay; we are managing.”

While the four brands within Motus’ import business – Kia, Hyundai, Renault and Mitsubishi – are still able to secure new stock, some premium-brand vehicles, which typically have a higher number of computer chips, are not currently available to the larger Motus automotive retail network, says Arbee.

“We don’t know more than what the OEMs (original-equipment manufacturers, or vehicle manufacturers) tell us. We continue on a day-to-day basis, stock is available and we are selling as best we can.

“The message we are getting from OEMs is that we’ll get back to a new normal situation by October, November.

“If that happens, we can live with the pain, but if October comes and they cannot deliver, then there will be another problem.”

Motus is currently selling preowned vehicles at a ratio of almost one used vehicle to one new vehicle, with the buoyant preowned market to a large degree driven by the shortage of new vehicles.

Under normal circumstances, the ratio is 0.6 to 0.75 used to one new, says Arbee.

With the supply of new vehicles to remain tight, Arbee expects Motus to see a ratio of 0.8 to 0.9 used to one new for another 12 months.

“Once we get new stock, we should get back to 0.7 preowned to one new.”

Arbee expects South Africa’s new-car market to reach between 450 000 and 470 000 units for the financial year ending June 2022, aided by rental companies returning to the market and buying new stock to the tune of 20 000 to 25 000 units for the 12-month period.

He adds that it will cost Motus between R1-billion and R1.5-billion to replenish its own rental fleet as the tourism industry works towards rebuilding capacity in the Covid-19 era.

He adds that the group’s car rental business is currently working on increasing customers’ self-service capabilities.

Motus late last month delivered its financial results for the year ended June 30.

Revenue was up 19% in the period, compared with the previous financial year, to R87.2-billion, with operating profit up 78%, to R3.8-billion.

Motus sold 6% more new vehicles in South Africa in the 2021 financial year than in the 2020 financial year, at 86 304 units, with preowned sales up 15%, to 81 900 units.

Motus sells one in every five new vehicles in South Africa.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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