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Recession will close over 1,000 franchised dealers, say accountants
publication date: Dec 10, 2008
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author/source: Robin Roberts
Motor retail experts at Grant Thornton believe more than 1,000 franchised outlets will close next year. Recessionary conditions are impacting on dealers and manufacturers, forcing them to take a more realistic view of the new car market. Nigel Ruddock, national head of Grant Thornton automotive services, told delegates at the AM Financial Management conference that he predicts the network of 5,200 franchised retail outlets in the UK will shrink to between 3,500 and 4,000. He said: “This will be painful, but it might not be bad news in the medium term. There have been too many dealers making little to no profits for too long. There are too many dealers chasing too few customers.” Grant Thornton’s advice for dealers is to keep things simple and focus on doing the basics well. Partner Paul Burrows suggested that to survive the recession dealers should follow a principle based on ‘the four pillars of strength’ - people, process, cash flow and balance sheet. Train people and keep them positive, analyse whether the process works, and consider cash and income carefully, he said. |
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