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INTERVIEW | Barloworld's planned exit from car sales business comes as sector faces significant challenges

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Barloworld has been an official Cat dealer since 1927
Barloworld has been an official Cat dealer since 1927
Supplied

Industrial giant Barloworld's planned exit from the vehicle retail space it has been in for almost half its 118-year existence signals a new chapter for the company, as it works to whittle down its portfolios and find new growth.

Since its inception in Durban in 1902, when the company ventured into business through woolen goods, blankets and coats, it has grown to become one of South Africa’s biggest corporates, with an equipment division made up of earthmoving equipment and power systems, and its automotive and logistics divisions. And for the past 60 years, Barloworld has been a big player in the automotive industry, building up the segment to include car rental, motor retail, fleet services, used vehicles and disposal solutions across its Avis Fleet, as well as Avis and Budget Rent-A-Car brands.

However, the vehicle sales industry has been beset by challenges, with South Africa’s new passenger car sales declining by 33% for the year ending in October - at 196 664, compared to 295 016 in 2019. Covid-19 played a big role in exacerbating the sales decline, while technology is also throwing a spanner in the works for car dealers. The entrance and growth of digital platforms, such as We Buy Cars, also means that there is unprecedented competition for dealerships, as the platforms take up a share of the market that currently has 1 600 dealerships, according to National Automobile Dealers' Association.

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