The Fiat, Alfa and Jeep dealership was acquired by Super Group Dealerships, a division of Super Group Trading.
The Competition Tribunal approved the transaction last week without any conditions. This approval was in line with the recommendation of the Competition Commission.
The commission, in its recommendation to the tribunal, says the proposed transaction was unlikely to result in a substantial prevention or lessening of competition in any relevant markets. It further found that the proposed transaction does not raise any public interest concerns.
The transaction includes the fixed assets, all intellectual property, all inventory and other assets of Arnold Chatz Cars Constantia Kloof and an adjacent used vehicle and parts sales servicing business.
Super Group Dealerships hold vehicle dealership franchise agreements across many original equipment manufacturers (OEMs), including Toyota, Mercedes Benz, Jeep, Fiat, Alfa Romeo, Peugeot, Citroen, Opel, GWM, Isuzu, Hino, Nissan, Land Rover, Jaguar, Volvo, Suzuki, Renault, Mazda and Ford.
Super Group in February this year says Dealerships SA reported strong profit growth for the six months to end-December 2021 despite a significant shortage of inventories resulting from the semiconductor supply issue. Revenue increased by 5.0% to R4.49 billion.
Super Group CEO Peter Mountford attributed this to significantly higher average new and used vehicle retail price increases during the past period.
Profit before tax increased by 16.2% to R115.8 million and operating profit by 13.7% to R155.3 million, with operating margins improving from 3.2% to 3.5%.
Mountford says the operating profit performance was due mainly to stronger vehicle sales and a good aftermarket parts and service performance.
However, Mountford says the shortage of semiconductors continues to be a significant challenge and is having a severe impact on new vehicle stock availability, most notably in the premium segment.
This, in turn, is causing a shortage of used vehicles as a result of fewer trade-ins, he says.
Mountford adds that new vehicle sales volume declined by 2.9%, underperforming the sales statistics of automotive business council Naamsa due largely to the division’s higher sales exposure to the premium segment, while used vehicle sales volumes declined by 12.5%.
“A stressed consumer environment and vehicle shortages will continue to make the South African dealership market challenging.
“With an increased focus on growing entry level sales volumes and with the semiconductor crisis expected to abate towards June 2022, this business will improve sales volumes in comparison with the prior year, to at least match naamsa’s growth statistics.
“The business will also continue to reap the benefits of rightsizing, cost containment initiatives and the efficiencies inherent in multi-franchising,” he says.