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The Citizen
07-05-2025
- Automotive
- The Citizen
Proton responds to leave claims: ‘we are not exiting South Africa'
Despite the imminent return of its parent company Geely, the lion brand, through CMH, will not be leaving local soil for a second time. Proton has made it clear that it won't be leaving South Africa for a second time soon. Image: Proton Its future in South Africa having been in doubt ever since its high profile return three years ago, Proton importer, Combined Motor Holdings (CMH), has it back at claims this week of the Chinese-owned Malaysian brand ceasing operations due to faltering offset. Struggling Relaunched with the X50 and X70 SUVs, before the addition of the Saga entry-level sedan and flagship X90 SUV, Geely-owned Proton has struggled to a find footing in the local market with its first full year of reported sales in 2024 yielding an offset of 888 units. ALSO READ: Proton X90 helps Malaysian carmaker stand out from the crowd According to the latest sales figures by the National Association of Automobile Manufacturers of South Africa (Naamsa), 226 Protons have so far departed from dealership floors throughout the first four months of 2025, which alluded to a possible withdrawal before year-end. Geely returning Heightening matters further is the imminent return of Geely itself to South Africa, whose products, aside from the Saga, provide the base for the majority of Proton's current range. Proton parent company, Geely, will return to South Africa before the end of 2025. Image: This includes the X50 being a rebadged version of the Geely Binyue, the X70 being based on the Boyue and the X90 derived from the Geely Haoyue. Bold claims At the time of the brand's relaunch, CMH CEO, Jebb McIntosh, said, 'luxury brands have become so unaffordable for the majority of South Africans. The purchase of the stake by Geely has transformed Proton. Now pre-facelift X70 was one of the first Geely models to receive Proton badging. Image: Proton 'When the brand became available, we jumped at the opportunity for several reasons, but mostly, we saw a gap in the market for a quality SUV within an affordable price bracket'. At the same event, Proton South Africa Managing Director, Greg Snodgrass, said the brand would be aiming at comparative Volkswagen and Mazda products rather than Chery and Great Wall Motors (GWM) Haval based on the tagline of 'affordable luxury'. 'Proton is staying' Earlier this week, an obtained annual report by CMH alleged that the importation of distribution of Proton products had become difficult and that a decision on the brand's future would likely to be made before year-end once current inventory runs out. Saga currently serves as Proton's only sedan and overall entry-level model in South Africa. Image: Proton Since January, numerous attempts by The Citizen seeking clarity on Proton's local operations have fallen on deaf ears, the most recent in February going unheard. In a statement on Wednesday (7 May), the automaker said the claims of its departure are unproven and that the annual report about the supposed sales difficulty 'was strictly in relation to stock liquidation of ageing inventory in a very difficult and competitive market— a standard industry practice to prepare for the arrival of exciting new models'. X90 currently tops Proton's local product range. Image: 'Proton is not exiting the South African market. Proton is strengthening its home market presence by preparing to launch new-generation vehicles, including compact sedans, hatchbacks, and competitive B-segment SUVs with internal combustion and hybrid powertrains,' the statement concluded. More soon At stands, no further details about the mentioned new products are unknown, however, with apparent assurance now been given in spite of the pending arrival from Geely, expect more to be revealed within the coming months. NOW READ: Proton pair passes test, but has bigger things to worry about
The Citizen
02-05-2025
- Automotive
- The Citizen
How Chinese brands are disrupting SA's motor retail market
At least a dozen more players are vying for a share of a market that hasn't grown since 2019. Mahindra now sells as many vehicles in SA as Nissan, and the 'invasion of low-priced foreign imports' means 'many jobs may be lost' locally. Picture: Mahindra website The extent to which Chinese vehicle brands, particularly SUVs, are upending the motor retail market in the country is starkly laid bare in the annual results of Combined Motor Holdings (CMH), published on Wednesday. CMH is a useful proxy for the market given the breadth of the marques it runs dealerships for under franchise. It has 43 retail dealerships representing 29 brands in KwaZulu-Natal (it owns practically every dealership in Umhlanga), Gauteng, and the Western Cape (practically Cape Town). At the headline level, things don't look too bad, with revenue in its motor retail/distribution division up 4% and profit before tax down 'only' 12%. CMH CEO Jebb McIntosh says this was 'caused principally by the pricing pressure which was intensified by the invasion of low-priced foreign imports and the consequent decreased sales volumes of the traditional locally sourced brands'. Here, he specifically highlights Chinese and Indian manufacturers. ALSO READ: Chery, GWM, Foton and BAIC: Who's who in Chinese car zoo? What the numbers reveal This seismic change is seen in monthly sales data from the Automotive Business Council (Naamsa). In March, four of the top 15 manufacturers of passenger and light commercial vehicles (LCVs) were from India and China. And this excludes models being manufactured in India by Suzuki (Swift, Baleno, Fronx, Ertiga), Toyota (Starlet, Urban Cruiser, Vitz), Nissan (Magnite), Hyundai (Grand i10, i20), Renault (Kiger, Triber). One analysis published last year showed that two thirds of the 20 best-selling passenger cars in SA during Q2 were manufactured in India. Mahindra now sells as many vehicles in SA as Nissan (about 2 200-2 300 a month), while together GWM (which includes Haval), Chery and Omoda and Jaecoo now sell as many vehicles as Volkswagen (around 4 700-4 800). So successful has this push by Suzuki been that it has overtaken VW as the second largest manufacturer locally by sales volume. CMH operates five Suzuki dealerships, four each for Haval and GWM, and three each for Chery and Mahindra. It also owns 14 Foton dealerships out of 55 in the country, with the brand focusing on LCVs, taxis and small trucks. CMH says the 'introduction of the Foton light commercial range has exceeded expectations' and the product 'featured in the February local top 10 sales list for commercial brands'. ALSO READ: Changan and Deepal brands officially approved for South Africa It believes Foton will be a 'meaningful profit contributor in the year ahead'. (It sees another bright spot in the aftermarket parts division MPD, which increased profits 22%. Because this operation is focused on brands of Indian and Chinese origin, it believes 'the increased volumes of such vehicles in South Africa augurs well for the future'.) A significant amount of the pain is being felt in the SUV segment, with all of the Haval, Chery, Omoda and Jaecoo models being SUVs. Variants from European and Asian manufacturers, including Volkswagen, Mazda, Mitsubishi, Kia, and (to a limited extent) Ford, are feeling the pinch. Others, like Nissan and Volvo (which is pivoting to an all-electric future), have exited the segment completely. Volvo has cut its local dealer network from 25 (more recently 19) to just seven, and CMH will operate four of those going forward. ALSO READ: VIDEO: Dongfeng debuts as latest Chinese brand in South Africa A market of no growth McIntosh says that the 'phenomenal entry of importers' has meant that 'although the market has shown no growth in five years, there are at least a dozen more players vying for a share'. In 2014, new passenger and LCV sales totalled 612 430. Five years later, this had declined to 508 573. In 2024, it was 484 556. Over the past decade, sales are down 21%. He says the 'luxury vehicle sales market has been hardest hit in recent years and has been in decline for almost a decade'. 'Statistics record a 10% fall in sales between 2022 and 2023 followed by a further 8% contraction during 2024.' At the other end of the market, there has been a 'sharp decline' in sales of minibus taxis. McIntosh says the 'pullback of SA Taxi Finance following allegations of fraud within the ranks of operators, and mounting bad debts, has prompted the principal motor finance houses to cut funding, thereby reducing sales by up to 80%'. ALSO READ: Chinese automakers presence felt in SA; challenges mount for automotive industry Impact on local manufacturers, employment The big impact is still to be seen on local manufacturers. McIntosh says, 'the unrestricted proliferation of Chinese and Indian vehicle imports has placed extreme pressure on local producers, and many jobs may be lost unless there is more government support'. Naamsa highlighted in January that in 2024, for the first time since Covid-affected 2020, vehicle exports declined 'to 308,830 units, down by a substantial 22,8% compared to the record performance of 2023 when the industry exported 399,594 units'. It cited various factors including 'a slowdown in demand in the EU, the domestic automotive industry's key export region, due to low economic growth, stricter emission rules, and competition from cheaper electric vehicle imports from China in the region, as well as the timing effect of new model introductions in the domestic market by major exporting OEMs [original equipment manufacturers]'. This was all before US President Donald Trump's tariff war, which if enacted fully (as originally envisioned) will surely push local manufacturers to the brink. This article was republished from Moneyweb. Read the original here.
IOL News
29-04-2025
- Automotive
- IOL News
Combined Motor Holdings faces challenges with a 26. 2% profit decline
Combined Motor Holdings CEO Jebb McIntosh said industry leaders had predicted that national vehicle sales would increase between 3.5 to 5% this year, but all views hinged on significant caveats, particularly relating to interest rates and political stability. Image: Supplied Combined Motor Holdings' (CMH) headline earnings a share fell 25.6% in the year to February 28 as vehicle affordability continues to wane among South African consumers. The dividend declared fell 22.3% to 171 cents a share from 220 cents last year. Revenue increased 3.2% to R13.25 billion. Total profit fell 26.2% to R301.49 million, marking the second year in a row of decline. CMH operates in the motor retail and distribution, car hire, and financial services segments in South Africa, employing 2,666 people. It has 43 retail motor dealerships representing 29 brands in Gauteng, KwaZulu-Natal, and the Western Cape. Its Mandarin Parts Distributors business imports aftermarket vehicle parts. CEO Jebb McIntosh said in the results that while a mild resurgence in new vehicle sales in the last quarter was encouraging, it was insufficient to rescue the market and lift it to the 2019 pre-Covid level. 'Vehicle finance houses have recorded that few newcomers are being added to the customer base, with only 10 million of 65 million South Africans being able to afford a vehicle, let alone a new luxury vehicle sales market has been hardest hit in recent years and has been in decline for almost a decade,' he said. Looking to the new financial year, he said industry leaders had predicted that national sales would increase between 3.5% to 5% this year, but all views hinged on significant caveats, particularly relating to interest rates and political stability. 'Early economic optimism has been curbed somewhat by the furore that followed the advance leaking of the government's intention to raise the VAT rate by two percentage points. The group's prior year losses on Proton have been stemmed, and a significant return is expected from the first full year of Foton activity,' he said. Although not yet back to pre-Covid levels, inbound tourism potential growth provided some optimism for the car hire segment. 'The predicted, although seemingly stalled, trend of interest rate cuts will also provide welcome relief against fleet borrowings,' said McIntosh. He said that in the past year within the group, several dealerships underwent costly restructuring and repositioning to take advantage of brand and product changes. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ford was now more focused on the light commercial market; although it had shown growth in various segments, its scope was more limited. Nissan was no longer producing its previously very popular and affordable half-ton and one-ton pickups. Some of its key models sourced from Japan had been discontinued because they were no longer affordable locally. Volvo's intention to focus on electric and hybrid models had severely hampered its local attraction. The dealer network had been cut from 25 dealers to 7, which would operate only in the major metropolitan areas. CMH would operate 4 of the 7 survivors and expected to benefit from a greater share of the workshop and parts sales business. The Proton import and distribution operation continued to be challenging. Current inventory would be sold during the first half of the coming year, and thereafter the group and the Malaysian manufacturer would decide on the way forward. In contrast, the September introduction of the Foton light commercial range had exceeded expectations. The launch was well supported by the Chinese manufacturer, and the product featured in the February local top 10 sales list for commercial brands. He expected sales to enjoy a further surge in June when a new cabover model would be launched. A network of 55 local dealers had been established, of which 14 were owned and operated by CMH. A further 5 dealers would be added this year. Foton was expected to be a meaningful profit contributor in the year ahead. BUSINESS REPORT
