Retail Motor Industry Struggling Amidst Economic Challenges

In the face of a dire economic downturn, the retail motor industry is grappling with unprecedented challenges. The Motor Industry Staff Association (MISA) recently received notice of the imminent closure of eleven retail stores belonging to an international tire producer. This decision stems from the industry-wide struggle, with dealerships and stores forced to restructure in a bid for sustainability, often resulting in employee layoffs.

The escalating crisis is evident in the closure of multiple dealerships, a trend exacerbated by South Africa’s economic challenges. High operational costs and a shrinking economy have led to the closure of businesses, creating a ripple effect throughout the industry. Martlé Keyter, MISA’s Chief Executive Officer: Operations, revealed that 53 MISA members were retrenched due to the closure of three dealerships in Gauteng. Furthermore, a significant dealership group announced restructuring plans affecting eleven outlets nationwide, although the exact number of employees affected remains uncertain.

The industry’s woes are compounded by daily power outages, soaring fuel prices, and a record-high 8.25% interest rate, the highest in 14 years. This perfect storm has significantly impacted not only vehicle sales but also the entire industry’s value chain. Buyers are struggling to secure financing due to negative credit records, further hampering sales. A recent survey highlighted that 30% of middle-class consumers purchased cars in the past year, emphasizing the importance of fuel efficiency in their choices.

Martlé Keyter, MISA’s Chief Executive Officer

The burden on consumers intensified in October when fuel prices surged unexpectedly. Petrol prices rose between R1.08 (for 93 Unleaded) and R1.14 (95 Unleaded), and diesel prices increased between R1.93 (low-sulphur 50ppm) and R1.96 (500ppm). The escalating cost of living and diminishing take-home pay have also taken a toll on mental health, particularly in a performance-driven industry dominated by men.

Regrettably, the industry has witnessed a tragic increase in suicides, shedding light on the pressing issue of mental health. Mental health problems, including suicidal thoughts, often remain concealed due to stigma and inadequate data collection. The World Health Organization (WHO) has projected a 90% global increase in suicide rates in 2023, with South Africa ranking third in Africa for suicide rates.

In response to this crisis, MISA emphasizes the importance of seeking help and support. The organization leverages its extensive networks, including the Women’s Forum and Young Workers’ Forum, to connect members with nonprofit organizations offering assistance. In these trying times, it’s crucial to remember that suicide is never the solution and help is available for those in need.

Source: KnysnaPlett