Car dealer hopes new venture will be a towering success

Mar 10 2010 By Chris Knox, The Journal

AN autotrader who has branched out into making and selling towers to enable dealerships to expand expects the new business to hit sales of £18m within three years and create more than 36 jobs in the North East.

Last year Steve Hodgson, boss of Newcastle-based dealership Hodgson, set up Autopod Solutions UK with Tony Whelan, of Newcastle builder Whelan Construction. The company will sell units to car dealers which they can cheaply install next to their premises to store and show cars.

The firm is already putting the finishing touches to an eight storey car tower near The Metrocentre in Gateshead, which will sit alongside a new two storey showroom to be opened by Hodgson in later this year.

The pair launched the venture after Mr Hodgson struggled to find the space and investment to open up an additional showroom, a problem that he said had plagued the motor trade before the onset of the economic downturn.

Although the ‘cubes’ are currently being made in Germany, Mr Hodgson plans to shift production to the North East, which would initially create 36 jobs in the region. He expects the business to expand "significantly" as he builds a nationwide market.

The towers, which are also being sold as an environmentally friendly way of increasing showroom space, can be built up to eight levels, holding 32 vehicles, and are held together with a central lift. The pair are also selling mobile prefabricated workshops and small scale multi-storey parking systems.

Mr Hodgson said that he was already in advanced talks with two interested parties and said that he expected to be installing 12 towers and 24 workshops each year by 2013, which would bring a turnover of £18m.

The new business comes at a time when his dealerships business is beginning to feel the effects of the economic downturn, with its profits expected to dip by £500,000 to £1m by the end of the year.

The business, which has increased its workforce by 17 to 150 over the last six months, saw its profits rise by 44% in 2009, with sales growing from 3,847 vehicles to 4,246 vehicles.

But Mr Hodgson said that a shortage of used cars because of the scrappage scheme and cost pressures among motor manufacturers would have a greater impact on its growth this year.

He said: "2009 has seen unprecedented levels of business failures and redundancies within the motor industry, but I believed it was crucial that we focused and concentrated on Hodgson and the future.

"I want to keep the Autopod business separate to Hodgson and believe the structures will become popular among dealerships looking to create more capacity once the market picks up.

"I am also confident that the overall motor trade will begin to pick up next year and I still expect sales growth for Hodgson this year even if profits fall."

Last year saw Hodgson add a Mitsubishi franchise to its existing Mazda, Toyota and Suzuki operations at the Silverlink in North Tyneside.