McCarthy Motor Holdings has announced a R68-million investment in three new dealerships to bring it in line with international motor retailing trends.

McCarthy Motor Holdings has announced a R68-million investment in three new dealerships to bring it in line with international motor retailing trends.

Once complete, the three dealerships will have sufficient capacity to sell more than 1 000 vehicles annually. One dealership in particular will be developed to sell in excess of 2 500 units per year.

"In all the developed markets of the world, the trend in motor retailing is towards fewer, but bigger and better outlets," said Brand Pretorius, chairman of McCarthy Motor Holdings. "Due to the demanding standards set by vehicle manufacturers, dealers are required to make substantial investments in facilities, which result in very high fixed costs. In order to generate an acceptable return on investment, volume throughput is needed."

New vehicle sales per outlet in South Africa are considerably less than that achieved by dealers in the US, the most competitive market in the world, Pretorius pointed out.

"Locally the average dealer sales per outlet are 280 vehicles per annum, compared to 770 units in the USA."

With 82 outlets in the McCarthy franchise dealer network it has an average throughput of 440 new vehicles per annum. "Our objective is to increase it to 600 over the medium term, and to 720 over the longer term," said Pretorius.

With this in mind, the company will open three mega dealerships within the next year.

McCarthy Nissan Gateway in Umhlanga will open its doors on 1 December 2005.

McCarthy VW Wonderboom in Pretoria is expected to open on 1 July 2005 and will be one of the largest Volkswagen dealerships in the country. Covering an area of 4167m², it will have parking bays to accommodate more than 200 cars.

When it opens in October 2005, McCarthy Toyota Kingsmead in Durban, with a sales target of 1 800 new and 840 used vehicles per annum, will be right at the top of high volume franchise dealers in South Africa. In addition, its service facility will have the capacity to handle up to 100 units per day.

"We are truly excited about these new dealerships. They boast the latest design features and are aimed at optimising internal efficiencies, while enhancing service levels and customer convenience," said Pretorius.