MOTOR dealer Jennings Ford has seen its profits plummet from over £555,000 to a loss of more than £1m as a challenging year for car sales took its toll.
And the Washington-based company’s financial report for 2011 shows that turnover fell to £129m from £143m the year before.
Despite last year’s tough trading conditions, the company sold its Sunderland site for £10m in April this year resulting in a pre-tax profit on disposal of £4.3m.
Following this, the firm’s banking facilities were successfully renegotiated and its renewed focus on the market allows the group to plan ahead with confidence.
The firm, which employs more than 450 people, blamed difficult economic conditions. It has also experienced tougher trade in the last two years with the end of the scrappage scheme and the increase in VAT creating added uncertainty.
The company operates Ford, Mazda, Seat and Kia car dealerships in Washington, South Shields, Middlesbrough, Stockton and Gateshead.
Uncertainty over the future of the dealership at Sunderland in 2011 adversely affected trading results from that site.
Despite the economic slump which has affected consumer spending in all areas, the introduction of the Kia franchise at the company’s site in Washington has made a positive start and directors remain confident that this will increase volume and profitability in future years.
Its trading report said: “The downturn in demand which was experienced during the second half of 2010 unfortunately continued throughout 2011.
“Turnover decreased during the year by 9.9%. Ford car operations represented 69.5% of total turnover, with commercial vehicles 14.7%, Mazda 9.6%, Seat 5.7% and Kia 0.%.
“There was a significant shift in the market, with customers downsizing to smaller cars, which in turn had a further detrimental impact on margins.
“In addition fleet sales were much reduced, and the expected cuts in public expenditure throughout 2011 affected the sale of commercial vehicles to local authorities in the region.