| Mon 19 May 2003, 10:57 | | CMH expects new vehicle models to drive 2003 growt |
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May 19, 2003
By Margie Inggs
Durban - A series of new vehicle ranges would enable Combined Motor Holdings (CMH) to continue its six-year headline growth curve over the next year, Jebb McIntosh, the managing director, said in the group's latest annual report.
Group operating income on shareholder's interest has averaged 45 percent the past five years.
"This translates into an exceptional return at attributable earnings level, even after providing for a conservative write-off of goodwill, proving that the group can achieve returns at a level higher than those achieved by most companies on the JSE Securities Exchange," McIntosh said.
New management at Ford Motor Company will launch a succession of new, competitively priced Ford and Mazda models from next month, aimed at recovering lost market share.
"The company has also agreed to a rationalisation of franchised outlets in the metro markets where CMH is represented, which will generate further volume and profit for the group," McIntosh said.
Nissan has continued to improve its market share and profitability worldwide.
McIntosh said it was speeding up the development of more stylish vehicles and a "very attractive" range would be launched towards the end of the year
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Not to be outdone, Honda's new Jazz small car, the first in 20 years to outsell the Corolla in Japan, will hit the market later in the year.
Maldwyn Zimmerman, the chairman of CMH, said the export boom that the industry had experienced over the past six years had boosted South Africa's vehicle manufacturing and associated industries, which now represented the third-largest sector in the economy.
"The improvement in the international competitiveness of our local market will ensure that vehicles are more affordable in the domestic market, help stabilise employment and generate much-needed foreign currency," he said.
For the medium-term future, Zimmerman believed the group had scope for organic growth in its fledgling car hire and financial services sectors.
"However, on the motor side, CMH needs to secure a number of meaningful acquisitions to maintain its track record of earnings growth," he said.
While the primary focus of expansion would be in the domestic market, Zimmerman said CMH would benefit in the long term if some of its earnings were denominated in foreign currency.
CMH's share price was unchanged at R12.50 on Friday.
