CMH: The quiet over-achiever
Established nearly four decades ago by a couple of partners with a small footprint of Chevrolet and Datsun franchises, Combined Motor Holdings (CMH) has steadily grown to become a JSE listed business with a turnover of more than R10 billion per annum.
This home grown motor retail giant with its head office in Umhlanga, KwaZulu-Natal, is now recognised as a Top 100 South African company employing 2 900 people in franchises representing 23 motor vehicle brands, as well as two other motor industry related divisions operated within the group.
“While the group has grown substantially over almost 40 years, it has never been spectacular or headline-grabbing. This is part of CMH’s strategy and corporate culture as we can only by restrained, carefully considered expansion add value to our shareholders,” says CMH’s Chief Executive Officer Jebb McIntosh.
CMH currently owns 67 vehicle dealerships countrywide representing franchises for Volvo, Land Rover, Jaguar, Citroën, Nissan, Honda, Ford, Mazda, General Motors (Chevrolet, Isuzu and Opel), BMW, Mini, Toyota, Lexus, Volkswagen, Fiat, Alfa Romeo, Suzuki, Infiniti, Kia, Renault, MG, as well as Navistar and UD Trucks heavy commercial vehicles. It also owns the specialist luxury used vehicle franchise, Investment Cars.
Other group operations include financial and support services (CMH Fleet solutions, CMH Finance, CMH Insurance, CMH Carshop, CMH IT), car rental (First Car Rental), distribution and franchising (Bonert’s, National Workshop Equipment, CMH Green, British Motor Distributors) and marine and leisure services (CMH Marine and Leisure, Waterworld).
But how did all this come about?
According to Mr McIntosh it all started in 1976 when a couple of business partners, including himself and the now-retired non-executive director Maldwyn Zimmerman, founded a company now known as CMH.
From small beginnings as a Chevrolet, Datsun franchise holder the group quickly established itself with more new vehicle dealerships countrywide, including franchises for other vehicle brands. Eleven years of rapid, yet controlled, growth followed, before the next big step was taken...
“It was an exciting time. Thanks to support from the vehicle manufacturers which we represented, we were able to build the business from a solid footing,” says Mr McIntosh. “Our core principles, based on family values, were established back then, and even though the group is much bigger now, those same values still holds true today.”
As part of its expansion strategy the board in 1987 decided to list CMH on the Johannesburg Stock Exchange. This bold move attracted investments from the blue-chip companies Sanlam and the Old Mutual Group, but more than 70% of the equity was still held in-house.
The group’s steady growth path continued and in 1999 the franchise for the international vehicle rental groups National and Alamo was acquired and restructured as National Alamo within CMH.
Growth continued unabated and in 2003 the group reported a turnover of just over R7 billion. Addressing the changes in the South African business environment and the unique challenges it presented, CMH in 2006 announced that Thebe Investment Corporation, the country's oldest Black Economic Empowerment company, had taken a 15 percent stake in the company for R294 million.
While the group was restructured to reflect the new shareholding, operationally nothing much changed and CMH continued to show solid growth and good results, ensuring the group’s survival and stability during the economic downturn in 2008 and 2009.
In 2008 CMH restructured its car rental business again, registering the subsidiary First Car Rental and also acquiring a service contract to operate the Germany-based Sixt rent a car brand in South Africa.
Last year CMH was also recognised as one of the Sunday Times Top 100 Companies, which acknowledges the best-performing businesses on the JSE, based on their shareholder returns over the past five years. The group also delivered another solid set of financial results for the first reporting period of last year.
“While we are proud of our achievements over the last decade or so, we have not really shared this with a wider audience,” says Mr McIntosh. However, according to him the group has come to realise that some stakeholders and customers are not fully aware of all the products and services CMH can offer them.
“In our ever expanding business there is a real need to address this. We have therefore appointed a PR specialist company, Outlook Africa, to assist the group in keeping the media, other stakeholders and our customers informed on CMH’s strategy into the future.”