Car dealer throws off industry’s reverses

Jul 10 2008 by Peter McCusker, The Journal

A NORTH EAST motor dealer is defying the gloom elsewhere in the sector after posting a near 20% rise in turnover while others begin to feel the squeeze from the economic downturn.

Newly-released figures for the UK show the new car market fell 6.1% in June this year compared to 12 months ago.

Earlier this month Nottingham-based Pendragon, which bought Sunderland group Reg Vardy for £506m in 2006, said it had cut 500 jobs.

But County Durham-based Holiways has posted a 19% rise in revenue, for the year until April 2008, of £38.6m.

The surge can be partly explained by additional revenue from its fourth site which was opened in Bishop Auckland in November last year.

In their annual report the directors say: “Car sales operations have performed well throughout the year and consistently achieved new vehicle sales in excess of manufacturers’ objectives.

“The directors believe this is a particularly good indicator of performance.”

Holiways is a Ford Direct specialist with access to thousands of nearly new cars. It is based at its Newton Aycliffe garage and also has forecourts in Durham and Hartlepool.

There are also signs the used car market is holding up better than the new car market.

Paul Everitt, chief executive, of the Society of Motor Manufacturers and Traders, said: “We are now seeing concerns about rising fuel bills and household costs dampening consumer confidence, leading to slower demand for new cars. This slowdown is not unexpected, but signals an increasingly tough retail environment. Used vehicles may be more attractive in the current climate.”

Three other North East car dealerships have reported falls in turnover for 2007 in annual accounts published in recent weeks, The Journal can reveal.

The Jennings Group, a Ford dealer with branches across the region, saw turnover fall slightly from £154m to £152.3m.

Richard Hardie Ltd, a 30-year old family-run firm, saw its turnover fall by 2.6% last year compared to 2006.

It runs Peugeot main dealerships from its head office in Sunderland, plus Chester-le-Street and Ashington, where it also has a Chevrolet franchise.

Teesside-based RMB Automotive – a Toyota and Lexus dealer – also reported stagnant turnover for the last year down £600,000 to £37m.

In its annual directors’ report they say: “As for many businesses the environment in which we operate continues to be challenging, due mainly to the credit crunch.”

But its owner and managing director Robert Bennett says sales so far this year are up 5%.

He said: “Trading at the moment is more difficult than it has been. We are perhaps not moving as we would like, but we are a good business with good brands.” The company’s confidence is witnessed by the ongoing £600,000 revamp of its existing Yarm body shop.

Mr Bennett added: “When Yarm is completed we expect this to help us maintain our year-on-year increase.”

He believes certain marques will fare better in the current economic and environmental climate.

“There are three factors at play here and they are the environment, the cost of fuel and whether a car is economical or not.

Green cars which are economical such as the Toyota Yaris will not feel the pinch as much as some of the other brands such as Land Rover,” added Mr Bennett.

We are perhaps not moving as we would like, but we are a good business with good brands.