Independent dealers closing down?

quarryman

Driving down the Naas Road yesterday onto the M50 and noticed one of the car dealers had vanished replaced by a 'Euro Wash'.

Anyone else noticed others shutting down around the country?

Tipsy Mac

I've not noticed any yet but it's only a matter of time, I'd say the banks have given alot of them until January when sales pick up to get their house in order.

unkel

quarryman wrote: »

Driving down the Naas Road yesterday

"Independent dealers" over there open and close all the time

quarryman

unkel wrote: »

"Independent dealers" over there open and close all the time

what is the correct name for them?

This one had been there for a while?

Not that I'll miss this particular one.

helimachoptor

quarryman wrote: »

what is the correct name for them?

This one had been there for a while?

Not that I'll miss this particular one.

Who was it?

Hellrazer

The motor trade is fooked this year.Plenty of dealers going to go down the tubes before the year is out especially the ones sitting on huge amounts of used stock that they can shift.I cant even see the banks letting some of them get to January.

The Mooney group let go something like 35 last week.Thats roughly 5 per dealership and theres rumours that a couple of the dealerships in that group are going.

quarryman

helimachoptor wrote: »

Who was it?

Honestly can't remember the name, even though i was in there once or twice. There was definately a cowboy feel about the operation.

unkel

quarryman wrote: »

There was definately a cowboy feel about the operation.

That was my reason for using the quotes. Independent dealer sounded very posh for some of that lot around the Naas road

quarryman

unkel wrote: »

That was my reason for using the quotes. Independent dealer sounded very posh for some of that lot around the Naas road

well i was trying to be generous in my definition.

tbh, i wouldn't miss any them if they all dried up.

MonsieurD

Oyster Car Sales, Dromkeen (on N24 - main Limerick Waterford road) are gone about three weeks ago. They were there a long time dealing in second hand stock only. Normally a good stock of cars in the forecourt (30+ cars). I am assuming that their demise is due to the downturn in the economy.

Definitely very difficult times for the car dealers in Ireland.

I reckon November/early December will be a crucial time for Dealerships. If orders for new cars is way down at this time (as I suspect it will be), they will have to rethink the huge profits that they have become accustomed to making on each new (and secondhand car) sold during recent years.

I have no pity for the big Dealerships - hopefully good times for the customer are on the way!

-Chris-

MonsieurD wrote: »

huge profits that they have become accustomed to making on each new (and secondhand car) sold during recent years.

Most dealers make 1.5-2% net profit on their operations. Hardly huge profits.

MonsieurD wrote: »

I have no pity for the big Dealerships - hopefully good times for the customer are on the way!

Yeah, when the dealer goes bust and you have to travel 30 miles further to get your car serviced, that'll show 'em!

Car-dealer

As a small car dealer, ie a very small operation with low overheads, I can confirm that larger dealers were and continue to seek silly money (%profits) for some cars.

I know this as I see the same car come up in the trade and be put on sale for crazy money, sometimes as much as €10,000 profit. I work on low overheads and therefore charge the lowest profit percentage I can afford to make the business work, thus I have a better chance of selling and making a small but worthwhile return, and customers of mine get good cars at very fair prices.

Now I know larger outfits have massive overheads - staff, buildings, insurance, power, stock ect ect but...

These hard times are actually corrective times whereby customers are now getting a fairer deal!

-Chris-

Car-dealer wrote: »

These hard times are actually corrective times whereby customers are now getting a fairer deal!

I think you're right, these are corrective times. I think the current economic climate is going to be good for the economy in the long run - it's going to focus businesses and force them to abandon wasteful and unproductive processes they've been getting away with up till now.

I also think that this is good for the consumer both short and long-term in that it will increase competitiveness and (hopefully) customer service.

I don't think the sentiment of "they've been ripping us off for years, I'm glad to see some of them closing down. Serves them right!" is constructive at all. I don't want to see any business go bust (and people become unemployed, and the knock on effect of those people not spending their money in other businesses who will in turn go bust).

If someone runs their business badly, they deserve to lose it. If they run it well, they deserve to be rewarded. We shouldn't wish ill on businesses, if we don't like what they do or how they do it we should merely withdraw our custom.

Bearcat

pal of mine went into a north dub garage with 6.5k in his pocket. He was looking at a 03 525i selling at orig 16k, 88K on clock. Dealer nearly snapped punters hand off for the cash and he got a beautiful car.

I feel in one way sad that dealers are on their knees but they did screw us in the good times......

whiterebel

AudiChris wrote: »

Most dealers make 1.5-2% net profit on their operations. Hardly huge profits.

About as realistic as Petrol retailers making 5c per litre and Publicans "protecting their margins........."

We have the 2nd cheapest cars factory to dealer in the EU, and yes we have high VRT and Tax, but work it out - where does the rest of it go?

Car-dealer

I wouldn't sell my mother a €13.500 car for €6.500 - excellent story but that dealer was either mad or stupid ..or perhaps on the verge of bust!

I recently did a deal with a buyer and gave them €1500 off to agree a sale on a car that should have been priced around €22995, that I had priced closer to €20000, so they got a good deal, but on the above scenario they would have walked in with €10000 for a €20000 car! - times are a bad, but not that bad lol

-Chris-

whiterebel wrote: »

We have the 2nd cheapest cars factory to dealer in the EU, and yes we have high VRT and Tax, but work it out - where does the rest of it go?

So,we're in an economy where taxes are so high that the factory will sell us the cars for less then they sell them to other markets, and that's your proof that margins are high here?

That logic's not working for me, sorry.

Tigger

Bearcat wrote: »

pal of mine went into a north dub garage with 6.5k in his pocket. He was looking at a 03 525i selling at orig 16k, 88K on clock. Dealer nearly snapped punters hand off for the cash and he got a beautiful car.

I feel in one way sad that dealers are on their knees but they did screw us in the good times......

pics or it didn't happen

ninty9er

AudiChris wrote: »

So,we're in an economy where taxes are so high that the factory will sell us the cars for less then they sell them to other markets, and that's your proof that margins are high here?

That logic's not working for me, sorry.

Have to agree with Chris there. Also, nobody got screwed. People didn't dirve as hard a bargain as they should have, but if I was a dealer in 1998-2002, I would have been building up a massive cash reserve for now as it was never going to last forever. These are the smart business people, and these are the ones that will survive.

One of my uncle's sold only 1 new car in the whole dealership in July....1. And the customer for that tried to screw them playing off against another dealer the day before she collected, but the other dealer refused to deal with her as someone else had already registered a car for her. The other uncle is selling alright as the Kuga is in high demand, though there aren't enough of them, and neither are selling used cars...almost all new, if any.


Neither has seen anthing as slack since the early 80s.

whiterebel

AudiChris wrote: »

So,we're in an economy where taxes are so high that the factory will sell us the cars for less then they sell them to other markets, and that's your proof that margins are high here?

That logic's not working for me, sorry.

Seeing as you're defending the dealers, I wouldn't expect it to.

whiterebel

ninty9er wrote: »

Have to agree with Chris there. Also, nobody got screwed. People didn't dirve as hard a bargain as they should have, but if I was a dealer in 1998-2002, I would have been building up a massive cash reserve for now as it was never going to last forever. These are the smart business people, and these are the ones that will survive.

One of my uncle's sold only 1 new car in the whole dealership in July....1. And the customer for that tried to screw them playing off against another dealer the day before she collected, but the other dealer refused to deal with her as someone else had already registered a car for her. The other uncle is selling alright as the Kuga is in high demand, though there aren't enough of them, and neither are selling used cars...almost all new, if any.


Neither has seen anthing as slack since the early 80s.

Try to deal with car companies that have been caught encouraging anti-competitive practice? I tried it 3 years ago and got nowhere. How obvious it was that they were under instruction not to drop the actual price, but to get around it offering a tow-bar, alarm etc. Compare it to the situation in the UK and that's how bargaining is done.

L-M

MonsieurD wrote: »

Oyster Car Sales, Dromkeen (on N24 - main Limerick Waterford road) are gone about three weeks ago. They were there a long time dealing in second hand stock only. Normally a good stock of cars in the forecourt (30+ cars). I am assuming that their demise is due to the downturn in the economy.

The reasons he is gone are because his cars were pretty crap quality, all had high mileage and were over priced. I been there a few times looking at cars and was dissappointed each time.

There also was a garage half way out the Limerick-Newport road that has closed as well, although it was due too a fight between the two co-owners. The name of the place escapes me...

ninty9er

Limerick-man wrote: »

The reasons he is gone are because his cars were pretty crap quality, all had high mileage and were over priced. I been there a few times looking at cars and was dissappointed each time.

There also was a garage half way out the Limerick-Newport road that has closed as well, although it was due too a fight between the two co-owners. The name of the place escapes me...

It's a pity that Orange Motors guy wouldn't go the way of the wall!

L-M

ninty9er wrote: »

It's a pity that Orange Motors guy wouldn't go the way of the wall!

Where is he? I know the name but a few garages spring to mind...

ninty9er

Limerick-man wrote: »

Where is he? I know the name but a few garages spring to mind...

Behind Hegarty's on the Tipp Road

Edit....just carzoned him...he's now called NRG Motors....the Nth name change in the last few years....it all stems from Castletroy Motors anyway.

L-M

Ya sure Castletroys Motors we that, then something else, now something else again. I think they were avoiding what was said in the papers:D

-Chris-

whiterebel wrote: »

Seeing as you're defending the dealers, I wouldn't expect it to.

So, rather than explain your logic and validate your point, you dismiss my query due to where I work...

:rolleyes:

Darragh29

ninty9er wrote: »

Neither has seen anthing as slack since the early 80s.

I've a good mate in Renault Sales and he hasn't sold a single new car since the middle of last month. This is a lad who was moving 1-2 new cars a day six months ago. Scary times ahead...

Darragh29

There was an independent car sales showroom up on the Greenhills Road, just beside Stewarts Land Rover Dealership, that shut up shop a few months ago. Can't remember what they were called...

whiterebel

AudiChris wrote: »

So, rather than explain your logic and validate your point, you dismiss my query due to where I work...

:rolleyes:

I have no idea where you work, and you really need that logic explaining?.... better that you show your 1.5-2% if its actually your business?

copacetic

whiterebel wrote: »

I have no idea where you work, and you really need that logic explaining?.... better that you show your 1.5-2% if its actually your business?

I think we all need your logic explaining, not a word of your posts makes any sense.

whiterebel

copacetic wrote: »

I think we all need your logic explaining, not a word of your posts makes any sense.

We have the 2nd cheapest price Factory to dealer, and while VRT is and was high, not the highest in the EU, yet we managed to have the second highest price to consumer in the EU. Some of the discrepancy seems to have been removed with the new CO2 based VRT system.

-Chris-

Why do you think that the factory sold us the cars cheaper than (pretty much) every other territory? So we could make more money than everyone else, or because we'd be uncompetitive without the support?

E92

whiterebel wrote: »

We have the 2nd cheapest price Factory to dealer, and while VRT is and was high, not the highest in the EU, yet we managed to have the second highest price to consumer in the EU. Some of the discrepancy seems to have been removed with the new CO2 based VRT system.

And what exactly has this got to do with dealers? Even if your theory were true, why did most manufacturers pass on any VRT savings in July to the consumer, and some even managed to better the amount they were supposed to be giving off? They hardly did it for the good of their health.

Standing up for dealers for me is akin to defending diesel, but you started off on a rant about dealers and have now suddenly changed track and are criticising dealers for something that the manufacturer does. Even before your rant changed direction and completely avoided the issue, it's hardly the dealers' fault that people were prepared to pay over the odds for a car.

It's called economics in action.

whiterebel

E92 wrote: »

And what exactly has this got to do with dealers? Even if your theory were true, why did most manufacturers pass on any VRT savings in July to the consumer, and some even managed to better the amount they were supposed to be giving off? They hardly did it for the good of their health.

Standing up for dealers for me is akin to defending diesel, but you started off on a rant about dealers and have now suddenly changed track and are criticising dealers for something that the manufacturer does. Even before your rant changed direction and completely avoided the issue, it's hardly the dealers' fault that people were prepared to pay over the odds for a car.

It's called economics in action.

Where did I blame manufacturers? Started off blaming dealers, still blame dealers. And the dealers woudl want to be pretty stupid to not pass on a Government measure to reward people for going green - I think even John Gormley might have reacted to that? After all if it dropped VRT, it doesn't affect their margins, does it?

-Chris-

whiterebel wrote: »

I have no idea where you work, and you really need that logic explaining?.... better that you show your 1.5-2% if its actually your business?

Ok, I'll play along seeing as there's nothing good on TV.

I just googled car dealer profit and found this article where they say...

Sunday Business Post wrote:

Gross profit margins for dealers have fallen to between 3 per cent and 5 per cent. For every new car sold at €25,000, the salesman’s cut is only around €1,000 and €400 after overheads.

Another of the family’s companies, Motor Services Limited, which owns some of Dublin’s best-known dealerships, including Ballsbridge Motors, Park Motors and Grange Motors, made an operating loss in 2005 of €649,000 from a turnover of €217.5 million.

...and those are 2005 figures when times were good!


Here's a 2005 article from the Irish Times giving figures from the last published accounts of the major car importers/dealers. I've given highlights below incase you don't have time to read it:

paraphrased by me from the Irish Times via BusinessPro.ie wrote:

According to James Treacy, managing director at BusinessPro, average published profit margins for car dealers are less than 1 per cent with distributors having margins of over 4 per cent on average.


Distributors:

O'Flaherty Holdings made €45.5 million profit on a turnover of €828 million in 2003 (5.5% profit).
Frank Keane Holdings made €21 million profit on a turnover of €204 million (10.2% profit).
Ford made €4.3 million on a turnover of €275 mil*lion (1.6% profit).
Convest, the main holding company for the Gowan Group, made €15 million profit on turnover of €234 million (6.4% profit).
Glencullen Holdings distributing Renault and including other businesses made €7.2 mil*lion on a turnover of €214 million (3.4% profit).
The Scanveco and DAF Dis*tributors made €844,000 on a turn*over of €101 million (0.84% profit).


Dealers:

Motor Services made a loss of €716,000 on a turnover of €221 million (a loss! :eek:).
Windsor Motors made a profit of €2.5 millon on a turnover of €159 million (1.6% profit).
Johnson & Perrott made a profit of €5.7 million on a turnover at €125 mil*lion (4.5% profit).
Clareview Motors, owned by Irish Car Rentals made €1.3 million on a turnover of €51.5 million (2.5% profit).
JA Boland in Wexford made €1.3 mil*lion on a €27.7 million turnover (4.6% profit).
The Ray O'Brien Group made €3.2 million on €20.4 million turnover 15.6% profit apparantly...).
Carroll & Kinsella in Blackrock, Dublin lost €774,000 (another loss! :eek:).
Esmonde Motors, owned by the Murray Group, lost almost €3.9 million (and more loss! :eek::eek::eek:.

So for the dealers detailed above, that's €13.284 million profit from a turnover of €604.6 million, aka 2.2% profit.
I've had to ignore C&K and Esmonde as I don't know their turnovers. I'm sure their combined losses of €4.67 million would have brought the percentage profit down a bit.

...and incase you're not bored enough yet, here's an article written by TADA that says 1.5% also applies in Canada.





P.S. I'm no accountant, so if I'm calculating any of this wrong or making incorrect assumptions, someone please correct me.

RedorDead

Nice work Chris, think its hard for some people to fathom that dealers margins on new and used car sales go towards the huge bank loans they have on premises and on overheads such as heating, lighting, wages, administration, insurance, advertising etc etc.

When you factor it all against each other theres very little profit left at the end of it all.

paddydriver

"Another of the family’s companies, Motor Services Limited, which owns some of Dublin’s best-known dealerships, including Ballsbridge Motors, Park Motors and Grange Motors, made an operating loss in 2005 of €649,000 from a turnover of €217.5 million"

But you gotta wonder how much the directors paid themselves in that same period. <MODEDIT> unproven allegations removed <EDIT>

whiterebel

As paddydriver alluded to above, you wonder how much was taken in salaries and expenses before profit/loss was declared. In my own business I legitimately declare very low profits once my expenses and wages are taken out (And not on a massive turnover either). It is one of the problems that the highest earners pay little in taxes due to the creativity of their accountants. Still, they would want to be brilliant if those figures are any way near right. Be interesting to see who is on the Irish Rich list that has a stake in a distributor or dealership.....One springs immediately to mind, but I better not mention his names or I might get fired!!!

whiterebel

AudiChris wrote: »

...and incase you're not bored enough yet, here's an article written by TADA that says 1.5% also applies in Canada.


.

I'm not long back from Florida and they are selling brand new Corollas there for $14,000 approx, 0% finance for the first year, and 2-3% after that. I don't know how they do it at those prices. GM are offering "Employee discount" at all their dealers, cutting thousands off the price of a new GM, yet other dealers are advertising $500 off on top of the GM discount.

the other thing is, Ireland seems to be somewhat unique in the garages that are built with all the glass and steel structures. I don't recall in seeing that many of these in France, Germany, Spain or the UK? A Garage owner I spoke to reckons they are forced to do this if they want the franchise. Seems unfair if we are the only country that has that standard.

Darragh29

whiterebel wrote: »

the other thing is, Ireland seems to be somewhat unique in the garages that are built with all the glass and steel structures. I don't recall in seeing that many of these in France, Germany, Spain or the UK? A Garage owner I spoke to reckons they are forced to do this if they want the franchise. Seems unfair if we are the only country that has that standard.

Known elsewhere as all style and no substance...

copacetic

bmw or audi garages in uk or germany tend to be exactly like the newer ones here.

-Chris-

copacetic wrote: »

bmw or audi garages in uk or germany tend to be exactly like the newer ones here.

That's my experience too.


Also, Google images of any UK Audi dealership and you'll see they're the same design as here too.

http://www.audi.co.uk/audi/partner_uk/uk_847/about_us.html - see the building in the background. It's called "hanger style" and would be the same design as the Irish dealers (except on a larger scale).
This has now been replaced by "terminal style" which new dealers will be based on.

The manufacturers have very strict guidelines with regards to the design and construction of the dealership (down to the furniture and desk lamps). If you don't adhere to those you're liable to lose your supply contract.