South African automotive giant takes a hit from cheap Asian imports 

Motus has been under pressure from cheaper Asian imports and the continuation of a buying-down trend among South African motorists. 

However, the company said it noticed a strong recovery in new car sales towards the end of 2024 as interest rate cuts and increased optimism boosted consumer spending. 

This was revealed in the company’s interim results for the six months ended 31 December 2024, which Motus described as a ‘tale of two quarters’. 

Motus is an international importer and distributor of passenger, light commercial vehicles, and aftermarket parts, with South Africa being its largest market. 

It is the exclusive importer of Hyundai, Renault, Kia, and Mitsubishi in South Africa and neighbouring countries, making up around 16.9% of the new passenger vehicle market in its home market. 

The company also has extensive retail and rental operations in South Africa, the United Kingdom, and Australia. 

In terms of its retail operations, which include dealerships from brands it does not have exclusivity deals with, Motus controls over 20% of the new vehicle market in South Africa. 

However, this share has declined as cheaper Asian alternatives grow rapidly in South Africa, and motorists continue to buy down instead of upgrading. 

While still having a strong 20.3% of the retail automotive market, this is a decline from 23.1% just a year earlier. 

Motus said its importer brands continue to face market pressure and are being impacted by the sluggish growth in consumer demand. 

These brands are also facing “strong competition from the Asian brands that are further penetrating the market, as well as consumers buying down to entry-level vehicles”.

Motus also flagged a shift in consumer preferences to pre-owned vehicles, which has impacted its performance in this segment and its sales of new cars. 

Suzuki, GWM (Haval), and Chery have been the major beneficiaries of these trends, with their sales skyrocketing in recent years. 

In 2014, Suzuki sold a mere 6,402 cars throughout the year. Now, it sells nearly the same number of vehicles monthly, with its monthly figures peaking at 6,006 cars sold in October 2024.

Over the same period, Haval has grown its sales from 428 cars a year to 18,962 and Chery has shot up from 1,297 to 20,341 cars a year. 

These cheaper imports, largely from manufacturing facilities in India and China, are beginning to impact Motus’ financial performance. 

While its aftermarket parts business showed strong growth, its two key operating segments, import and distribution as well as retail, saw declines. 

This resulted in revenue declining by 2% to R56.2 billion for the six months through December 2024 and operating profit declining by 4% to R2.5 billion. 

Thanks to lower finance costs, the company managed to grow its profit after tax by 1% to R1.1 billion.