South Africa's mobility sector surprised many this year. Nearly 600,000 new vehicles were sold in the 12 months, far exceeding most forecasts. However, the headline numbers hide what operators feel on the ground every day: The market became louder, faster and more competitive, while margins squeezed.
At CFAO South Africa, the 2025 financial year was characterized by disciplined execution amid a volatile environment due to aggressive new entrants, currency fluctuations, margin compression and increased customer price sensitivity. Yet behind these challenges lie structural opportunities.
This year wasn't just about recovery; It was about recalibration and, in some areas, reinvention. The market surprised rapidly, but achieving growth was not easy. This required realignment, cost-conscious strategies and consistent implementation across our subsidiaries.
Portfolio breadth: flexibility by design
One of the strengths of CFAO South Africa is that we are not a single-focused business. While this diversification does not eliminate risk, no single structure can do that, it reduces dependence on a single profit stream and allows judicious capital allocation.
Each vertical strengthens the integrated ecosystem of the group. Our diverse presence across CFAO Mobility South Africa, CFAO Equipment South Africa, Toyota Tsusho Africa, Africa Mobility Solutions, Subaru Southern Africa, CFAO Healthcare South Africa and Aeolus provides both defensive resilience and strategic flexibility.
In simple terms, when a part of the economy slows down, a diversified portfolio can help maintain momentum. It also allows us to invest in the broader mobility ecosystem, so we can build resilience rather than chasing short-term spikes.
Discipline cannot be compromised
In an inflationary environment, working capital is not just an accounting item; This is a competitive tool. Poor inventory management leads to immediate penalties in the marketplace. Cost discipline is not negotiable. As our CFO Guillaume Thoumiaux emphasizes, this CFAO is embedded in the group's culture.
This is why fiscal discipline is no longer non-negotiable in CFAO South Africa. We have tightened stock management, examined operating costs and assessed investments based on a clear return horizon.
We track performance using NPAT and ROCE, not just top-line volume, because volume without returns is noise. This approach is all about the safety of the option. Strong returns generate flexibility: the ability to invest, acquire, modernize and grow; Even when conditions are unstable.
Market affected by new entrants
The main driver in the market has been the rapid emergence of new entrants. In just a few years, they have gone from being the fringes of the industry to commanding a significant share of the showroom floor, growing from almost no market presence in 2019 to about 15% by 2026. Their scale, speed and pricing have transformed competition, particularly in entry-level segments and their associated used vehicle ecosystems.
Thoumiaux explained simply: Selling price pressure is now a permanent feature. It matters because it changes perspective. When the pressure is constant, you don't wait for it to go away; You adopt your strategy accordingly. The key question is: How do you build a business that delivers consistent performance when pricing power is limited? The answer is to work with accuracy.
This includes understanding where margins are earned and where they are lost, reducing inefficiencies in the operating model, and maintaining a clear view of volumes, cash flows, and returns on capital. It also requires taking a tough, realistic approach to stocks.
where value is created now
New vehicle sales volumes increased, but declining margins changed the economics of the industry. The focus is moving towards sectors with more sustainable value: used vehicles, finance and insurance, and customer-focused after-sales service. These areas may seem less lucrative than a headline-grabbing fight over the price of a new car, but these are the areas where lasting customer relationships are formed, and where continuity matters more than promotion.
They demand operational excellence every day: efficient repair processes, strong underwriting discipline, service capacity planning and clear standards.
Our business outlook for the year is a mix of cautious optimism and measured confidence. Mobility's fundamentals are solid, especially in the used car market, F&I and after-sales services. However, success in 2026 will not depend on volume metrics alone. Reputation, empathy and collaboration are vital to our success. Customer-centricity, teamwork and consistency are always essential.
Trust is the strongest differentiator in a price-sensitive market
When consumers face pressure, they become more cautious. They compare more, delay making decisions, and have less patience for disappointment. Trust is not a “soft” factor; This is a strategic economic advantage.
Collaboration between subsidiaries has led to increased operational integration and market perception. Over the past five years, we have focused on building trust both internally and externally. That cultural shift is now reflected in the way the market views us. Our investments in digital capabilities, including refreshed brand positioning, improved web presence and cold sales call-center initiatives, have also begun to generate additional momentum.
OEM-aligned maintenance, warranty-backed sales and structured service protocols provide greater certainty for customers. When customers feel safe, they behave more consistently. This stability is important in volatile markets where discounts are easy to find. Our approach is pragmatic: service standards and reputation drive long-term income, while purely transactional competitors struggle to encourage repeat business.
Restrained expectations, clear priorities
Long-term acquisition growth remains part of our plans, but only within strict return limits. South Africa is highly competitive, cost-intensive and relatively import-light compared to many other African markets. Our capital allocation reflects this: CFAO South Africa invests where returns are clear, where risks are understood, and where execution capability is proven.
Apart from retail sales, our manufacturing and energy investments are also progressing. These are not quick-return projects. They are long-term commitments aimed at strengthening the mobility ecosystem and building medium-term resilience.
See further: Discretion is not stereotyping
Performance does not depend solely on market momentum. At CFAO South Africa, we follow a deliberate strategy that enables us to grow not by luck but deliberately. We will continue to foster a prosperous future for the business and our team through disciplined capital allocation, consistent service delivery and the operational focus required to perform under pressure.