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Johannesburg - Listed investments company Sekunjalo Investments (SKJ) on Wednesday announced its first investment into the automotive sector via its wholly owned subsidiary Sekunjalo Motor Holdings.
Sekunjalo Motor Holdings has acquired a 10% stake in the Eastern Cape's largest DaimlerChrysler dealership, Ronnies Motors, and a 30% stake in Tata Mowbray (Western Cape) which holds the franchise for Tata Motors in the Southern suburbs, for passenger and light commercial vehicles.
Sekunjalo deputy CEO Norman Noland said the combined value of the two investments is approximately R12m.
He said the automotive sector was an appealing investment for three key reasons:
- it has been identified by government's AsgiSA policy as a priority sector that is capable of underpinning significant economic growth;
- there are real opportunities to cross-sell related products originated by Sekunjalo's Financial Services division; and
- "simply because of South Africa's love affair with the motor car".
He explained this was in part because of insufficient public transport, but equally because of the status it affords, a motor car is one of the first major purchases made by an individual.
"The growth in vehicle sales is mirroring the emergence of a growing middle class in South Africa."
Noland added that these two acquisitions would be followed by additional announcements from Sekunjalo Motor Holdings in due course.
"This is a growth sector we've identified and we intend making our presence felt," he said.
Ronnies Motors was started in 1948 and has branches in East London and King Williams Town. The dealership specialises in Mercedes Benz, Chrysler, Jeep, Dodge and Mitshubishi new passenger and commercial vehicles, and also has used car and commercial vehicle divisions.
The Tata franchise has the license to sell passenger and light commercial vehicles and will open its first showroom in early August with a sales outlet in Mowbray and a large dedicated service and parts centre in Ndabeni.
"We're launching a pincer attack on the vehicle sales market by entering both the top-end luxury market and the affordable end of the market simultaneously," Noland added.