Two More Main Dealers Forced to Close

I was disappointed to hear today about two main dealers that have been forced to close their doors.
McKeown Motors - main dealers for BMW, MINI, Opel, Mitsubishi, Kia and Peugeot for 30 years in Co. Meath closed their doors yesterday and Cashel Motor Works main dealers for Volvo, Peugeot and Citroen in Co. Tipperary are due to close on the 29th of this month.
Both were well established dealerships with excellent reputations nationwide  - so why would they be going out of business if as SIMI suggest "with this upturn in business, garages can start to re-employ staff they had to let go last year".
It prompted me to take a look at the registration statistics for the year to date and ask if maybe there's a bit too much spin being put on the numbers?

New car registrations New car registrations - 2009 V 2010
New car registrations - 2009 V 2010

On the face of it, a 44% increase with 68,782 units registered (Jan - June) is good news. However, like all statistics, given a differnt context the reality can be quite different.
Before drawing any conclusions on the present state of the motor industry we should bear in mind that this year's figures reflect the fact that dealers have started registering demonstrator models again. There has been a year on year increase in the number of cars being registered for daily rental purposes and the Government sponsored Scrappage Scheme has artificially inflated sales. Maybe things aren't as good as they're being suggested?

Reality Check
Reality Check Required?

My 'back of the envelope' figures would estimate;

  • 10 demo cars per dealer for approximately 400 dealers = 4,000 Units
  • 10% of total sales registered for daily rental use = 6,000 Units
  • Scrappage Scheme = 8,000 Units

Legitimate Sales

This would leave us with 50,782 legitimate sales - not very far away from the critical levels of 47,590 - the number we were at for the the same period last year when the industry was in crisis with large numbers of dealers closing their doors.

'Reality Check' required?

Whilst I understand that it's important to be positive about our industry and encourage consumer confidence we should be careful that we don't misrepresent the reality of current trading conditions as anything other than extremely difficult.
There are plenty of economic commentators warning about jumping to conclusions when it comes to calling an end to the current recession. Maybe the motor industry needs to take a similar  approach?

Ken - July 23, 2010 at 10:22 am
back of the envelope’ figures would estimate; * 10 demo cars per dealer for approximately 400 dealers = 4,000 Units * 10% of total sales registered for daily rental use = 6,000 Units * Scrappage Scheme = 8,000 Units THERE IS ONE OTHER FACTOR LEFT OUT ABOVE WHEN IT COMES TO THESE REGISTRATION FIGURES WE CAN'T FORGET THE PRE-REGS!! AN AMOUNT OF CARS REGISTERED AND PARKED UP IN STORAGE YARDS ETC
Shane Teskey - July 25, 2010 at 8:44 pm
Hi Ken, That's right I forgot to include pre-regs but I think that reduced stocking facilities from finance houses has meant that dealers simply can't afford to register a car without a buyer confirmed and waiting in the wings. From what I can see cars are now only being ordered from the factory against a confirmed customer order. The days of importing cars, registering them and deciding which customer will be lucky enough to get one are behind us (for the moment). PS. Interesting piece in Saturday's Independent on the same topic in which Alan Nolan comments "the recovery is still very fragile". Just spotted this article in the Leinster Express; Lewis Opel shuts its doors Published Date: 21 July 2010 By Staff Reporter LEWIS Opel in Portlaoise is the latest high profile car dealership in Laois to fall victim to the economic recession with its doors closing for the last time recently. The showroom on the Mountrath Road is now completely vacant and all cars have been removed from the premises. Signs in the windows and on doors in the premises state that it is "closed for business" with a number of recent trade-in offers still on display on some of the windows. The garage and parts area of the building also stands idle along with the vacant salesroom which is now virtually empty apart from a kiddies table and chairs which once kept children of customers occupied while cars were sold on the premises. Lewis Opel was one of the most established car sale operations in Portlaoise, having been in business for over 30 years. It is the second Opel garage to close in Laois/Offaly in recent years, with Church Road Motors in Tullamore, which had Opel and Peugeot dealerships, closing in the last year or so. It also follows a number of other well-known car dealers which have gone to the wall in the county in the past 12 months. Owen Reddy Motor Company of Mountrath ceased trading last August. The company catered to the high end of the motor trade, offering "modern executive cars." Cars on offer shortly before the closure included Ferrari, Lotus, Jaguar and Mercedes Benz. The previous May, Lismard Autoworld closed with the loss of 20 jobs. Towards the end of last year, it was reported that new car sales had fallen by 64 per cent and sales figures for 2009 were the industry's worst annual sales figure since 1988. The news of the closure of Lewis Opel came as a surprise in light of recent figures which showed that car sales so far this year have already exceeded the total for the whole of last year. Released by the Society of the Irish Motor Industry (SIMI), the new figures show there have been 57,898 new cars sold this year, 438 more than the total amount sold last year. This time last year, there were 40,933 new cars sold, meaning this year's figure is a 41 per cent increase on 2009. This upturn was attributed to the national scrappage scheme which helped the beleaguered car industry rally somewhat after a disastrous 2009.
Bob Flavin - July 29, 2010 at 5:08 pm
A dealer doesn't really make all that much from selling a new car, there is far more money in selling the trade in or second hand car. I knew all the guys in Lewis Opel, nice guys they were too, the last time I was there they only had 3 second hand cars. It's a shame to see any business close but the market is changing, a better selection of used cars will attract buyers.
Shane Teskey - July 29, 2010 at 7:09 pm
Hi Bob, Agreed but where are all the used cars going to come from? With a 63% drop in sales from 2009 - there's going to be a serious shortage!
Shane Teskey - July 30, 2010 at 4:53 pm
Sad to see another business in trouble. Insolvency Notices Barclay Motors Limited 29 July 2010 Meeting details: North Star Hotel, Amien Street, Dublin 1 on 12th August 2010 at 10am. Registered address: Isola House, Ballymount Road, Dublin 12 Last accounts filed: 25/01/2009 CRO number: 448130
Bob Flavin - July 30, 2010 at 7:12 pm
That's a shame, I'm beginning to wonder about the future of the car industry in Ireland. Do you think that UK imports will start to rise?