AUTOMOTIVE REMANUFACTURERS' ASSOCIATION

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FW: NADA Newsletter | The Dealers’ Voice | February 2021


Thinking beyond the immediacy of survival will help regain growth

in reshaping the next phase

 

The year 2020 was a ruthless year for many. And the motor retail industry has not been spared from this devastating economic tsunami. Full of unwelcome surprises and unavoidable new realities, what started out as a health issue spiralled into an unparalleled economic and humanitarian crisis.

 

People and enterprises alike have had to adapt swiftly to cope with massive uncertainty and unease. And yet, the determination of society and businesses has led to the rise of a new scenario – the “new normal” in which to continue and succeed.

 

Most industry pundits predict that it will take most of 2021 before we begin to shift out of our current economic woes. So, what does this mean for the dealer?

 

Last year, most dealers started this process, and I encourage you to remain resolute by continuing in this vein, maximising on all business opportunities, no matter how small, to ensure our sustainability into the future. With the right positive attitude, I’m convinced that our sector will emerge stronger. The current situation will reveal not only vulnerabilities but opportunities to improve as we navigate the challenging return to operational health.

 

As in all crises, opportunities emerge.  In an environment where there is little reliance on public transport, we anticipate repairs and maintenance on current and second-hand vehicles to provide a window of opportunity for us. Since September last year, it was reported that many dealers returned to near normality in workshops as a result of more regular commuting patterns. It was encouraging to see that pre-holiday services were close to normal numbers ahead of the December holidays.

 

Although the consequential decline in new vehicle purchases is evident, used vehicle sales will continue to remain strong as consumers retain cost conscious behaviour in these economically uncertain times.

 

We need to be cautious of a third wave, which is almost inevitable in the winter months. The roll-out of the vaccine will go a long way to keeping us out of further lockdowns, and create the necessary immunity down the line to strengthen the economy.

 

In such a rapidly changing environment, predictive certainty is somewhat illusive and outcomes for the 2021 retail motor industry are yet to be determined. But despite these variables, innovative and responsive commitment to adapt to industry and dealership trends, evolving to changing customer demands and with a keen focus on driving profitability, we are already beginning to take control of our future success.

 

While many of us couldn’t wait to put 2020 behind us, the pandemic and the resultant necessity for quick and effective change to sustain survival, has certainly altered the course of the new reality of 2021.

 

We need to think beyond the immediacy of survival, and actively work on our strategic survival, by looking to the full value chain. Franchised retail motor dealerships will need to innovate, transform business models and seek out further income streams and in so doing, help regain growth and momentum in reshaping the next phase.

 

With the current uncertainty, I encourage you to continue to effectively manage the different facets of the dealership, monitor all operations of the business, carefully manage inventory and maintain control over costs. Those able to accomplish this will best position themselves for success when the economy recovers.

 

Please continue to be safe and implement the safety protocols within your dealerships as well as in your personal lives. Mask up, maintain social distancing and continue with all hygiene requirements.

 

Take care and be safe.

 



Expected growth hiding real downturns

 

South Africa’s 2021 new vehicle sales will show double digit growth off 2020’s unforeseen low base but will also continue to show a decline in real economic terms says WesBank, the country’s leading vehicle and asset finance provider. WesBank CEO Chris de Kock delivered the bank’s view of the market and its annual sales forecast at the virtual 2021 Cars.co.za Consumer Awards


 

 

 

 

South Africa Automotive Retail Financial Performance Trends – July 2019 – December 2020


Financial performance in the last quarter of 2020 for all segments in the automotive sector have levelled out. The heavy commercial vehicles segment is showing the impact of the lower market demand. Last quarter performance for 2020 was better than the last quarter of 2019, a positive trend.

 

What are the future prospects? The continued negative impact of the pandemic globally and locally, is interrupting manufacturing supply chains and consumer confidence. Fortunately, automotive consumers in South Africa are spoilt for choice and brands who hold the right kind of stock will have an advantage.


 

 

 



VAF Dealer Introductory Commission (DIC) Industry Workgroup

 

Following on from regulatory investigations undertaken in the UK and Australian VAF markets, the Financial Sector Conduct Authority of South Africa (FSCA) initiated an industry discussion during last quarter of 2020 with a particular focus on the payment of Dealer Introductory Commissions (DIC) in the motor vehicle dealer space.


 

 

 

 

Have your say: Ghana Msibi, WesBank CEO of Motor

Vehicle finance in South Africa at the cusp of a complete revolution

 

With younger age groups starting to actively participate in the acquisition of assets, expectations on financial institutions and their offerings are changing rapidly. I expect the motoring industry, including vehicle finance, to evolve more in the next five years than it has in the past four decades.


 


Determination of sectoral employment equity targets:

Department of Employment and Labour

 

The Department of Employment and Labour (DoEL) recently invited a number of Members of the RMI to attend a consultation session held in anticipation of the identification and setting of employment equity targets for the Wholesale and Retail Trade and the Repair of Motor Vehicles and Motorcycles Sector.


 

 

 

 

 

RMI’s IR Seminar – Different types of employment contracts

 

We are pleased to announce that the RMI will be presenting an on-line seminar entitled:

 

DIFFERENT TYPES OF EMPLOYMENT CONTRACTS

 

•           When :       10 March 2021

•           Time :         09:00 am – 13:00 pm

•           Platform :   Microsoft Teams

•           Cost :         R575 for RMI members and R1 150 for non-members

•           Presenter : Johanita Olivier

 

Some of the topics of discussion will be:

 

 

You will find all the information relating to this seminar by clicking on this link

 

Secure your attendance by completing the registration form here.

Training material will be distributed to delegates electronically.

A certificate of attendance will be provided to each delegate.

 

 

 

StayAtHome

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