McCarthy Motors Limited is owned by Bid Auto (Who Owns Whom, 2008). Bid Auto is the vehicle retail and services division of the Bidvest Group Limited, a JSE listed investment holding company. Bid Auto is one of the largest competitors in the South African vehicle retail market with more than 130 dealerships and service outlets countrywide (www.bidvest.com, 2008). The Bidvest Group Limited acquired full ownership of McCarthy Motors Limited in 2004, giving Bid Auto access to all existing McCarthy dealerships and the 500,000 McCarthy customers nationwide (estimation, www.fin24.com, 2004). McCarthy Motors retained its brand name and its (highly experienced) top management team of 11 executive directors and 7 non-executive directors, with Mr. Brand Pretorius becoming Chief Executive of Bid Auto after the 2004 acquisition. This acquisition provides McCarthy Motors with the stability and resources of an international, highly diversified holding company. Their position within Bidvest gives McCarthy the capacity to absorb the current economic storms in South Africa better than their competition. Bid Auto currently forms 21% of the Bidvest Group (Who Owns Whom, 2008), with the other 79% diversified across other retail markets.
[...] In 2009 and 2010, car sales should grow by 10% annually while commercial vehicle sales growth should average There will be some market correction in 2011, but by 2012 the automotive market should see sales approach 860,000 units, up over 2007 levels Swot analysis As we are dealing primarily with the external market forces, we focused on opportunities and threats to McCarthy in terms of the broader market. OPPORTUNITIES THREATS Hangout for the 10 biggest Size and capacity production manufacturers of automotive parts relatively little 3rd sector the most important after Increase of the interest cost of miner industry and financial the national automotive credit for services individual from 10 to 15% in July 2007 ( due to the state, they Numerous investments and for most didn't want that middle class of of them invests from parent company south Africa has too much dept : they don t want to have a crisis Development program for automotive like in America with real estate) sector (MIDP) from 1995 to 2012: it allows carmakers to offset duties A big fluctuation of the rand on imported cars and components with exports, allowing them to Difficulties to recruit senior enjoy a much greater economy of executives from automotive scale as exports increase international companies ( problem of safety) 19 of the world rank for the production of automotives Threats of the China automobile industry and the other countries Market near to the European market like India and Brazil. [...]
[...] McCarthy can take advantage of current market conditions to successfully install itself as an unquestioned market leader in the automotive industry Actions The following are areas that McCarthy should be looking at to continue to gain ground against its competitors: With over 125 dealerships, there should now be an in-depth analysis undertaken to find exit strategies for the bottom 20% of dealers, taking margin, growth and geographic position into account. While recently many dealerships have invested heavily into infrastructure and in so doing have increased significantly their overheads, these business are vulnerable in uncertain climes. [...]
[...] McCarthy was one of the first companies to identify this driving force and have turned it into one of their strengths. The sturdy performance of online retail and McCarthy Call-a-Car call centers confirms this. To summarize our discussion about economic driving forces surrounding McCarthy, we state the following: due to adverse economic conditions the vehicle retail market has slowed down. Customer buying habits are also changing rapidly and must be kept in the equation. Customer sentiment is extremely important in this industry and we only expect a buying sentiment to return at the end of 2009. [...]
[...] We end our company overview of McCarthy Motors by summarizing as follows: McCarthy Motors is one of the largest established vehicle retailers in South Africa. The vehicle retail industry is (currently, 2008) struggling and the company's top management will be forced to revise their strategies if they are to survive. We have recently seen various strategic moves from McCarthy in this regard. According to the company's annual reports and customer ratings, strategic alignment within the company is on par; the strategies mentioned above is supported by all staff and customers are aware of McCarthy's strategic moves. [...]
[...] Appendices Appendix A McCarthy Principles Statement Our purpose To provide attractive and sustainable returns to our shareholders through the creation and retention of customers. Our values At McCarthy, we have a number of values that have formed the cornerstone of our business for close on 100 years. These are: To be fair and ethical in dealing with customers, suppliers, and our colleagues To operate in an environment of mutual trust and respect To show a total commitment to our customers To strive for employment equity To deal in a manner which is open and transparent To engender participation, empowerment and teamwork To recognize and reward for excellence. [...]
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