South Africa’s biggest car dealership network has a warning for BMW, Mercedes, and VW

The rise of affordable Chinese vehicles in South Africa caught the country’s largest dealership network on the back foot, resulting in it having to rationalise some parts of its business and slash benefits for senior management and some jobs. 

Now Motus is looking to get back on the front foot and expand the range of car brands it offers through its network. It expects this to boost sales and kickstart a new phase of growth for the company. 

In its latest interim results, the company outlined the impact of the rise of cheaper Chinese brands on its sales, with it coming under pressure despite soaring new car sales in South Africa. 

South Africa’s new car sales surged throughout 2025 to above levels seen pre-pandemic and hit the highest level seen in a decade. 

New vehicle sales totalled 596,818 in 2025, which represented growth of 17.8% year-on-year. Passenger vehicle sales were up 19.5%. 

Motus expects the strong sales growth to continue, with it projecting new vehicle sales of between 600,000 and 630,000 in 2026. 

However, the company has struggled to benefit from this growth, with it largely coming due to increased sales of more affordable vehicles, putting pressure on its margins. 

For the six months to 31 December 2025, Motus’ revenue rose by only 3% to R57.66 billion, with profit before tax rising by 21% to R1.86 billion. 

Looking at the company’s results more closely, it is clear that its retail and rental business is under pressure. This is Motus’ largest operating division, contributing around two-thirds of its revenue and profit. 

This division saw lacklustre revenue growth of 1% year-on-year and only a 4% rise in operating profit, despite surging new car sales in South Africa. Operating margins are tight at 2.7%. 

In South Africa specifically, operating profit surged after drastic changes were made at the SA Retail division, with it undergoing an optimisation process in the second half of 2025. 

“The operating profit increase of 22% in South Africa was primarily due to higher profitability from the importer brand dealers,” Motus explained. 

“Several traditional brands, however, continue to face margin pressure as a result of product repositioning and continued volume pressure in the competitive landscape, which has negatively impacted profitability.”

“This resulted in a number of loss‑making dealerships, which required a rebasing of the cost structure, overheads, and supplier optimisation to ensure the long‑term sustainability of the business.” 

The head of Motus’ SA Retail business, Gideon Jansen van Rensburg, said this is a once-in-a-generation shift, with the company having to react quickly. 

“The market has become more competitive, with new entrants, particularly Chinese brands, that have intensified the pricing pressures Motus faces,” Jansen van Rensburg said.

“This is placing pressure on the margins of the business. In response, we were required to rationalise our business by implementing back office synergies,” Jansen van Rensburg said. 

He explained that this restructuring has also included changes to the incentive structure of back office employees and administrative staff. 

Motus has so far retrenched 67 employees who it could not find other positions within its business, with some others taking up to a 30% salary cut to remain employed. 

“Our senior staff took salary cuts of up to 30% in our retail division, and now we are seeking to realign the incentive structures and company car benefits of our admin staff,” Jansen van Rensburg said.

To address the lack of presence of affordable brands within Motus’ network, it is looking to expand its portfolio to include Haval, Honda, Suzuki, Tata, and Mahindra. 

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

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.”