Barloworld in talks to sell its dealerships
Barloworld in discussions with Durban group to dispose of vehicle dealerships.
Barloworld is in talks with MMI Durban South Motors, a joint venture of the group with the Akoo family, to sell its motor retail business. Well-known in the KwaZulu-Natal business community, the Akoo family have owned vehicle dealerships since 1991 and entered the MMI Durban South Motors joint venture with Barloworld in 2003.
At the release of its interim results at the end of November, Barloworld indicated that the future of the vehicle dealerships in its Automotive and Logistics division, and the deployment of capital for it, was being reviewed. Discussions about its disposal are now “gaining momentum” according to Barloworld directors, and are expected to be concluded over the next few months.
The group’s motor trading division operates 43 new and used motor franchise dealerships in South Africa and Botswana, representing brands such as Audi, Ford, Toyota, Lexus, Isuzu, Mazda, Volkswagen, and Mercedes-Benz. The dealerships also have supporting finance insurance products, after-market services, and the business also invests in online platforms and toolsets for asset disposals.
Barloworld has been revamping its strategy due to the changed environment by expanding its geographic capability in the equipment business through the acquisition of Wagner Asia Equipment and accessing the less cyclical consumer sector through the acquisition of Tongaat Hulett Starch.
Following the slump in tourism and other travel through the Covid-19 pandemic, the group said that its car rental and fleet businesses had been consolidated under a single leadership team. Offers to buy the automotive portfolio were being reviewed, while the Automotive and Logistics divisions were integrated with centralised shared services.
Although the Automotive and Logistics divisions had seen a steady increase in activity as lock-down restrictions eased and new contracts were awarded, this year has however seen a sharp decline in new vehicle sales due primarily to the pandemic and weak economy.