Industrial group Imperial Holdings shut down 19 motor dealerships in the past year, reflecting tough trading conditions amid high interest rates and weakening consumer demand, it said on Wednesday.

Eight of the car dealerships sold new cars and the rest were used car dealerships. Imperial also sold two dealerships, which brings the firm's total dealerships to just 36 from 57.

Imperial is upgrading and relocating other dealerships as it prepares for an upturn in the motor market amid hopes that the short-term interest rates cycle has reached its peak.

CEO Hubert Brody told reporters and analysts at the results presentation that the firm was also looking at distributing cheaper Indian- and Chinese-made cars as part of plans to cope with the downturn and prepare for the upturn.

Indian and Chinese cars have cost advantage

Indian and Chinese cars have a "cost advantage, we will not be left behind" in snapping distributorship agreements for vehicles made in those countries.

For the year to June, the group's passenger car sales were down by 22 percent but light, medium and heavy commercial vehicle sales were up 10 percent. Used vehicle retail sales, dispersed through its Auto Pedigree dealership outlets, were 10 percent lower

Beekman Canopies and Jurgens Caravans also had lower sales but profitability remained satisfactory, the group said.

Earlier the group reported a modest three percent rise in revenue to R56-billion with its dealerships unit accounting for R19.2-billion of the total revenue.

The composition of the unit's revenue was 48 percent passenger vehicles and 52 percent commercial vehicles, as the group moves towards the commercial vehicle market amid higher demand due to increased fixed investment in the country.

Over the past year, a new Mercedes Benz Lifestyle Centre was opened in Bedfordview, and a MAN truck dealership was acquired in Johannesburg, strengthening the range of commercial vehicles Imperial sells.

Reporting its annual results on Wednesday, Imperial suffered a 49 percent decline to 615 cents in headline EPS from continuing operations and operating profit fell 20 percent to R2.9-billion.

The group also cited the weaker rand, equity markets and weak underwriting results in the insurance operations as the main reasons for the decline in earnings.

I-Net Bridge