Late surge lifts Colonial’s profit
The Colonial Motor Company’s revenue climbed by 4.6 per cent compared to the corresponding period last year with most of this growth being recorded in the final month of 2020.
Its report for the six months until December 31 highlights favourable trading conditions flowed through to after-tax trading profits being up by 58 per cent on 2019’s low result and up by 18 per cent on 2018.
Shareholders’ interim dividend has resumed at 15 cents per share, the same as the previously cancelled dividend due to the coronavirus pandemic.
Chairman Jim Gibbons notes the new-vehicle market for the full calendar year was down by 22 per cent on the previous year, but that disguised a stronger second half.
“Most of the decline in the second half was due to the absence of the seasonal concentration of rental-car registrations,” he says.
“The business and private market available to retail dealerships in the second half was very similar to the previous year.”
Gibbons, pictured, describes the new-vehicle market as now being “dominated by supply constraints” and adds “early Covid-19 predictions overestimated the market decline resulting in reduced ordering of product by distributors”.
The subsequent faster and stronger recovery has stayed ahead of supply due to coronavirus-related capacity constraints and supply-chain disruption.
“The issues are widespread. Consumers have adapted and are committing to forward orders or selecting from what is physically available. Near-new used vehicles are also affected with significant shortages.
“It is expected supply constraints and market volatility will continue to define the market. The need to constantly change and adapt will continue.”
As for the government’s proposed clean-car import standard, Gibbons explains this will be a supply-driven requirement for all new-vehicle importers to meet stringent carbon dioxide (CO2) emission averages by 2025.
Gibbons points out 95 per cent of the new vehicles registered in 2020 did not meet the proposed required average of 105g of CO2/km.
“The ability of the importing franchisors to meet the target in the required time frame cannot be taken for granted when international supply of very low-emission vehicles – EVs and PHEVs – is both limited and disrupted.
“The new technologies necessary to meet the required standard will cost significantly more than current price ranges.”
Operations expand
Meanwhile, Colonial has three ongoing facility developments.
In Christchurch, the Team Hutchinson Ford greenway project will be completed this financial year.
A public greenway bisects the dealership with the showroom and service reception building on the Tuam Street side.
The heritage service workshop has undergone a major refurbishment on the St Asaph Street side with provisions made to ensure vehicles can safely traverse the greenway.
At Lower Hutt, the separate Ford and Mazda showrooms have been completed, but other on-site work continues.
And in Botany, a new Southern Autos Manukau facility for Suzuki and Isuzu was slated to open in March. It includes a five-bay workshop.
Getting projects done
Colonial has completed a number of developments.
Capital City Mazda’s showroom opened in January on the corner of Pretoria and High streets in Lower Hutt. Construction continues on the Mazda service workshop behind the showroom.
Capital City Ford’s showroom on the opposite end of the High Street property in Lower Hutt is complete. Internally, Ford’s latest Brand@Retail vision has been brought to life with an array of showroom lighting.
MS Motors has taken on Bridgestone Motueka in addition to its Richmond Bridgestone business. This complements the dealership’s and the Richmond service-lane operation across the street.
The Wanaka Service Centre opened in November 2020. The facility has delivered brand separation for Macaulay Motors with Ford and Mazda, and Southern Lakes Motors with Nissan and Mitsubishi.
Finally, South Auckland Motors’ Ford showroom has undergone a revamp based on Ford’s Brand@Retail vision.
