Motus signs up 3,000 mechanics as it targets aftermarket business

Motus’s strategy of expanding further into the informal vehicle repair market is beginning to pay off, with the group signing up more than 3,000 mechanics to its loyalty programme as it plans to roll out small Midas store formats.

Motus distributes and sells accessories and aftermarket automotive parts for out-of-warranty vehicles. It sold 69,832 pre-owned cars in South Africa in the year to June, up 5% from the previous period. It also sells new cars, rents vehicles through Europcar and Tempest, and provides service and maintenance.

Motus designed a programme called Klutch, which offers mechanics in informal markets a loyalty programme to purchase products at Motus’s Midas stores.

Motus’s South African aftermarket parts business increased operating profit by 20%, supported by improved product mix, stronger margins from private-label offerings and expansion into previously underserved markets.

“What we’ve been able to do is provide a better and safer product, which is a new product through our Midas stores, linking it directly to those mechanics,” CEO Ockert Janse van Rensburg said in an interview after the release of Motus’s annual results for the year ended June.

We are planning to roll out more Midas Express stores, which will be closer to the market that we need to serve, specifically in these underserved market areas—  CEO Ockert Janse van Rensburg

Motus still sees significant growth opportunities in the aftermarket segment as consumers keep vehicles for longer.

“The one area where we feel we still haven’t unlocked the growth opportunity completely is maybe in aftermarket parts,” Janse van Rensburg said.

To support further growth, the group plans to expand its Midas Express format, smaller stores tailored to underserved communities.

“We are planning to roll out more Midas Express stores, which will be closer to the market that we need to serve, specifically in these underserved market areas,” he said.

The local performance stood in contrast to a more challenging environment in the UK aftermarket retail business, where operating costs surged.

Revenue and gross profit in the UK business both increased by 5%, helped by the introduction of FI Pro products. However, operating expenses climbed 13%, largely because of higher employment costs linked to increases in national insurance contributions and minimum wages.

Despite those headwinds, Motus remains committed to the market and plans to strengthen management and accelerate the rollout of digital solutions developed in South Africa.

“We are very much still convinced that’s part of our overall correct strategy,” Janse van Rensburg said.

The aftermarket business also stands to benefit from the rapid growth of Chinese vehicle brands in South Africa, though the impact will only become meaningful over time.

According to Janse van Rensburg, aftermarket demand generally emerges about five years after new vehicles enter the market because most cars are covered by service and maintenance plans during their warranty period.