VENTURES: Vuka In Buy-Out Deal
Recent Western Cape Business News
Cape Town-based scooter and motorcycle retailer Vuka Scuta this week signed a buy-out agreement with Loncin South Africa. According to the deal, Vuka will take over the current stock and parts inventory as well as the distribution of the Chinese manufactured range of street bikes, scooters, quad bikes, off-road bikes and cruisers.
According to Vuka South Africa managing director, Kevin Ferreira, Vuka was approached by Loncin and viewed the buy-out as a perfect opportunity for market consolidation in the current economic climate. “Loncin SA was looking for a buyer which could offer its own distribution channels, retail outlets and maintenance support. Loncin is a well-established brand with prime quality products and the deal will enable us to introduce a number of new models within a short period of time in addition to the existing Vuka range. We viewed this as a great way for product diversification and believe that the new brand can assist us in penetrating new markets. This also gives us the chance to keep our finger on the pulse of the motorbike market and to gauge market reaction,” mentions Ferreira.
Loncin South Africa distributed their motor cycles via third party dealers, whereas Vuka has built a strong national footprint of corporately owned stores. Vuka is committed to continue serving Loncin’s existing customer base with services, spare parts and routine maintenance and will honour all current warranties. Vuka will also offer training and support for all their branches to ensure that the take-over does not adversely affect Loncin customers.
Ferreira views the agreement as mutually beneficial. “Loncin is a major quality manufacturer and is the only Chinese manufacturer taking part in the 125cc class of MotoGP. Loncin was also appointed by BMW Motorrad to manufacture their 650cc Cross Country Engine, due to their technical capability and the company remains China's biggest 2 wheeler exporter.
“Vuka can definitely benefit from a product point of view due to their manufacturing standards. We have also been appointed by Loncin China to distribute to their wider territories such as Lesotho and Swaziland and will definitely explore distribution opportunities into the rest of the African continent. With their wider range of models priced between R6000 and R30 000, Vuka will also be able to meet a broader consumer demand and appeal to new customers,” states Ferreira.
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