Key to Tata’s reintroduction into the South African market will be “where it will play”, which will be more in the entry-level car segment, says Motus CEO Ockert Janse van Rensburg.

“It’s an exciting brand…It can go places.”

JSE-listed automotive and mobility group Motus on Tuesday announced its financial results for the year ended June 30. The group operates in the UK, Australia and South Africa, with 56% of its revenue generated in South Africa.

India’s Tata in August re-entered the domestic market, with four new models, after a six-year absence. The pricing of the Tiago was revealed on Tuesday, with the hatchback available with a starting sticker of R184 500.

While Tata will be active across the market – with the Harrier expected to lean towards the more pricey end, for example – the opportunity for building significant volumes rested in the entry-level segment, said Janse van Rensburg.

He said South Africa’s new-car market was heavily weighted towards the less expensive end of the market, as cash-strapped South African continued to trade down to cheaper alternatives.

Tata kicks off in the local market with a network of 40 dealers, with 20 of these in the Motus stable and the other 20 sites owned by independent parties.

Motus on Tuesday reported a 1% drop in revenue, to R112.6-billion, for the 12 months under review, with operating profit flat at R5.47-billion.

Motus’ Import and Distribution business saw a 3% drop in operating profit, with retail and rental down 6%. Mobility Solutions was up 4%, while the star of the show was the Aftermarket Parts business, which saw a 12% jump in operating profit.

Within the import business, Hyundai had a good year, with volumes up 18%. Kia sales were up 10%, but Mitsubishi was down 11% and Renault sales dropped by 7%.

Within the Retail and Rental business, Motus managed to increase both its new- and used-vehicle sales, with new up from 81 601 units in the previous financial year to 82 899 units, and used up from 85 228 units to 86 893 units.

The South African Retail business continued to be impacted negatively by reduced consumer disposable income, the buying-down trend, intense competition in the market, and a shift in vehicle sales from new to preowned as a result of customers seeking more affordable options.

Janse van Rensburg said Motus had widened its focus in the used-car market to be more inclusive of vehicles older than three years, instead of its previous emphasis on one- to three-year-old vehicles.

Aftermarket Parts had a stellar year, with revenue up 6%, and operating profit up 12%.