Several changes are in the pipeline in relation to McCarthy’s vehicle dealerships in Pietermaritzburg, the most notable one being the imminent closure of Volvo’s sales division in the city.
However, the news is not all negative, said McCarthy CEO Brand Pretorius, who revealed to The Witness that the country’s largest vehicle retailer will set up a new McCarthy Value Centre in the CBD in the coming weeks.
This new venture will boast two facets, namely a sales and service centre for McCarthy’s Chinese brands as well as a Call-A-Car dealership.
Pretorius said that the decision to close shop was taken in collaboration with Volvo SA.
He added that clients will still be able to service their vehicles in Pietermaritzburg as they plan to retain their Volvo technicians.
“The sales volumes have been too low to sustain a dealership. They have been making losses due to the depressed state of the market.”
Pretorius stressed that they will meet with those affected by the decision this week, adding that they are investigating the possibility of transferring staff to minimise job losses.
He noted that luxury brands are increasingly coming under pressure across the country. He said restructuring has become a nationwide phenomenon as a result.
The changes will also see the Peugeot and Land Rover dealerships essentially being “combined”, he said.
He added that they also plan to expand their McCarthy Toyota dealership by adding an Automark Used Vehicle component.
The new McCarthy Value Centre will boast several Chinese brands, including Chery, Foton and Meiya.
Pretorius said the Pietermaritzburg dealership will also serve the wider KZN midlands market.
Pretorius is bullish about the prospects of the new “value” segment, as consumers are increasingly price wary.
He said the Chinese brands have already made inroads in respect of cheaper bakkies, mini-buses, hatch-backs and sedans.
However, he warned that the general passenger vehicle market is in for a tough 18 months, with sales expected to decline even further.
However, the long-term passenger-vehicle market fundamentals remain strong, as vehicle ownership ratios are still very low.