NMI Durban South Motors Seeks Dominance in Botswana Market
• Wants total control of Barloworld Motors
NMI Durban South Africa Motors (Pty) Ltd is set to acquire total control of Botswana’s Barloworld Motors. A statement of notice released by the Competition Authority advises of the company's intention to acquire 100 percent of Barloworld Motors (Pty) Ltd, elbowing out the Botswana registered enterprise completely.
NMI DSM, a duly incorporated company in terms of the company Laws of the Republic of South Africa, currently has a 30 percent holding of a 50/50 joint venture initiative with entities owned or controlled by the Akoo Family of South Africa and Barloworld South Africa (Pty) Ltd.
According to the notice, NMI DSM has its strength in the retailing of new and used passenger vehicles and light, medium, heavy and extra heavy commercial vehicles. The brands that its dealerships sell include Mercedes Benz, Jeep, Smart, Fuso, Western Star, GWM and Mitsubishi. NMI DSM also provides associated services, among them the sale of automotive parts and accessories, and undertakes repairs. NMI DSM also arranges motor vehicle finance and insurance services for purchasers of its motor vehicles.
The target enterprise, Barloworld Motor, is a private company incorporated in accordance with the Laws of Botswana and has operated in the country for several decades. The company has been into motor retailing, selling new and used passenger, light, medium and heavy commercial vehicles and buses. The brands it sells through its dealerships include Volkswagen, Volvo, Audi and Ford. Barloworld Motors also provides motor vehicle associated services and parts distribution centres, as well as maintenance service centres for vehicles. In March 2016, Barloworld Automotive added two additional Mercedes Benz dealerships, namely Union Motors Lowveld and Union Motors South Coast, within their NMI-DSM joint venture.
The full acquisition of the enterprise will strengthen the company’s position in Botswana and will also add to the ever-growing empire of NMI within its southern Africa market. The Motor Industry Development Programme (MIDP) initiated by the Southern African Customs Union (SACU) is the major driving force in supporting more vehicle assembly and distribution initiatives. Many assemblers have begun developing linkages with manufacturers in order to consolidate synergies within the industry.
South Africa, however, has been the strongest competitor in the automotive industry within both SACU and SADC. The country boasts a high level of automotive skills and manufacturing base for automobile components and parts supported by iron and steel and engineering industries. According to the South African Reserve Bank, the industrial development programme has designed several incentive measures for its rapid development. The broader automotive sector contributed 7.2 percent to GDP in 2014, according to the Automotive Industry Export Council. The sector accounted for 30.2 percent of manufacturing output and 11.7 percent of export earnings, some $10billion, a record and up 12.7 percent.
From 2013 to 2019, before the impact of the COVID-19 pandemic, the nominal automotive export value grew by 96.4 percent, while the rate of the nominal import value was much slower, with an increase of 37.8 percent. The record automotive export value of $14.26 billion in 2019 reflected a substantial increase of 11.36 percent, compared to the $12.64 billion total export value in 2018. Record vehicle exports of 387 125 units in 2019 resulted in the vehicle export revenue increasing by $1.45 billion, or 13.86 percent, to $10.46 billion compared to the $9.01 billion in 2018.
This article was prepared by Data Collection & Analysis, a business research firm. Feedback or inquiries can be relayed to 76740658.