Newlands Renault Stopped Trading (Sunday Business Post 19-04-09)

olivermac

Saw this today and was shocked to see that times are bad for all in the trade.

http://www.thepost.ie/post/pages/p/story.aspx-qqqt=IRELAND-qqqm=news-qqqid=41190-qqqx=1.asp :eek:

R.O.R

olivermac wrote: »

Saw this today and was shocked to see that times are bad for all in the trade.

http://www.thepost.ie/post/pages/p/story.aspx-qqqt=IRELAND-qqqm=news-qqqid=41190-qqqx=1.asp :eek:

Heard that last week and drove past the showroom a couple of times this week. Still stock outside but it's all closed up and dark in the showroom.

It's a real shame as I used to buy my Renaults from them - Noel was an absolute Gent, but it's a poor location to get in and out of - and they sold Renaults!

Won't be the last announcement like this, I know of another large dublin dealer going in to administration on the 1st May, but we won't speculate on who.

Fozzie Bear

olivermac wrote: »

http://www.thepost.ie/post/pages/p/story.aspx-qqqt=IRELAND-qqqm=news-qqqid=41190-qqqx=1.asp :eek:

"Pat Keogh Ltd, a Limerick BMW dealership that had sales of more than €56 million in 2007, collapsed last month."

E56 million, fook me! Thats a lot of car sales and services in 12 months.

Damien360

Fozzie Bear wrote: »

"Pat Keogh Ltd, a Limerick BMW dealership that had sales of more than €56 million in 2007, collapsed last month."

E56 million, fook me! Thats a lot of car sales and services in 12 months.

Must be a typo. E5.6 million would be more like it and very good. Has any Irish buisness done any inward investment in their buisness with actual profits or have they all just got bank loans and spent the profits on housing.

Guy:Incognito

I wonder will the land be cheaper now? Could the governemnt or the quick thinking NRA jump in a procure it for the upgradeing of the junction to make it a lot easer to mae it free flow?

I was only thinking the other day that its been quiet on here with regard reports of garages closing in the last few weeks.

Damien360 wrote: »

Must be a typo. E5.6 million would be more like it and very good. Has any Irish buisness done any inward investment in their buisness with actual profits or have they all just got bank loans and spent the profits on housing.

taking 5.6m as direct sales and dividing it by an average of say 40k a car, thats 140 cars. Doesnt seem a huge amount, or is it?

delta_bravo

I remember in the old days when it was just a house and it was renovated into a massive showroom about 6 years ago. Shame to see it go

Guy:Incognito

delta_bravo wrote: »

I remember in the old days when it was just a house and it was renovated into a massive showroom about 6 years ago. Shame to see it go

I went in when I was buying my new clio in 2000 and it was a small little place. Ended up buying in Liffey valley (they were a full IRP £1,000 cheaper) which was only a portacabin at the time. Both were in swanky showrooms soon after.

Damien360

Stekelly wrote: »

taking 5.6m as direct sales and dividing it by an average of say 40k a car, thats 140 cars. Doesnt seem a huge amount, or is it?

3 a week in a five day week seems pretty decent to me. Especially for higher value cars. Dealers could enlighten us on this.

unkel

Damien360 wrote: »

3 a week in a five day week seems pretty decent to me. Especially for higher value cars. Dealers could enlighten us on this.

Nope. Stekelly was spot on with his feeling the 5 million wasn't right. Pat Keogh turnover in '07 was indeed €56 million. Joe Duffy had a turnover of €85 million that year - just to give a comparison.

Big Nasty

unkel wrote: »

Nope. Stekelly was spot on with his feeling the 5 million wasn't right. Pat Keogh turnover in '07 was indeed €56 million. Joe Duffy had a turnover of €85 million that year - just to give a comparison.

Interesting reading that article, especially when you see what has happened to many of those business sine. Imagine turning over €56m two years ago and going bust in '09! Just goes to show how bad things really are. :rolleyes:

testicle

MCMLXXV wrote: »

Interesting reading that article, especially when you see what has happened to many of those business sine. Imagine turning over €56m two years ago and going bust in '09! Just goes to show how bad things really are. :rolleyes:

turnover != profit

Fishtits

testicle wrote: »

turnover != profit

Obviously you're not managing a business...

Big Nasty

testicle wrote: »

turnover != profit

That's balls!

vectra

MCMLXXV wrote: »

That's balls!

matches his username

L-M

Only had this conversation today, you can turn over 56 million all you like, and some one can turn over 1 million and make more profit than you!

Big Nasty

Limerick man wrote: »

Only had this conversation today, you can turn over 56 million all you like, and some one can turn over 1 million and make more profit than you!

Very true, but I'm sure great money was made in many such dealerships in the good times. Also, if one can see what is happening to one's business they may well be better off ceasing trading now than trying to ride the storm and end up loosing what they made over the last ten years.

ninty9er

Also be aware that Keoghs asked to be liquidated themselves, not their creditors. Not wanting to speculate, but I doubt that sales volume was their main issue and it would seem like an "I've had enough of this business after 40 years" type decision, with the economic climate the perfect scapegoat if anyone feels put out.

High end new cars will always have a market, as will Rolex , expensive artwork and expensive wines.

Drummerboy08

Sad that Newlands are gone. They supplied us with our Renaults too - Odhran was a nice guy too.

Plenty more to come.

roosterman71

testicle wrote: »

turnover != profit

I read that as turnover is not equal to profit. Or am I being too nerdy knowing that ! means not?

run_Forrest_run

roosterman71 wrote: »

I read that as turnover is not equal to profit. Or am I being too nerdy knowing that ! means not?

don't worry, I read it as that too...not nerdy, just programmers (surely there's a difference:))

TomMc

But obviously you need to be turning over those kind of figures to make decent profits to repay for glass palaces (built on prime land / locations and at the height of the boom). Without major volume to sustain repayments, the whole thing comes crashing down. Even more humble premises would need high sales to meet overheads. Massive turnover may not automatically mean large profits, but it would be criminal not to make serious profit with that kind of turnover. The problem is when sales dry up and turnover is decimated, the whole operation becomes unsustainable. Boom or bust really.

ninty9er

I'd be fairly certain that anyone who built a Glasshouse in Limerick recently has more than likely owned the land since the 80s. Can't vouch for it though.

McSpud

MCMLXXV wrote: »

Interesting reading that article, especially when you see what has happened to many of those business sine. Imagine turning over €56m two years ago and going bust in '09! Just goes to show how bad things really are. :rolleyes:

I would view it as very poor management. Even 5% profit on turnover would lead to profits close to 3m. Seems crazy that can't make their business survive unless of course they spent all the money & have large loans on showroom renovations.

bostoncommon

average dealer turnover/profit ratio in 2007 was 1.7%!

StealthRolex

olivermac wrote: »

Saw this today and was shocked to see that times are bad for all in the trade.

http://www.thepost.ie/post/pages/p/story.aspx-qqqt=IRELAND-qqqm=news-qqqid=41190-qqqx=1.asp :eek:

maybe now the government will consider doing something on VRT. Removing it would be too little, too late but it might save some from going the same way.

bostoncommon

Removing VRT isnt the answer, it will only make the imports less expensive that whats after causing alot of the trouble.

-Chris-

The collapse in secondhand car values caused (mostly) by the change in the VRT system is what has the motor industry in the state it's in at the moment.

BlackWizard

AudiChris wrote: »

The collapse in secondhand car values caused (mostly) by the change in the VRT system is what has the motor industry in the state it's in at the moment.

I dunno, I think the recession had a big affect on the motor industry.

Damien360

BlackWizard wrote: »

I dunno, I think the recession had a big affect on the motor industry.

I thought every buisness had worked that one out already. I cannot believe anyone thinks VRT is the cause.

Big Nasty

Damien360 wrote: »

I thought every buisness had worked that one out already. I cannot believe anyone thinks VRT is the cause.

VAT reduction on the other would help stimulate the market. Dealers may will also get some work out of car owners prepping for NCT and sales from cars not worth spending money on for NCT.

testicle

roosterman71 wrote: »

I read that as turnover is not equal to profit. Or am I being too nerdy knowing that ! means not?

Correct.

!= is not equal to
~= is approximately equal to

niceirishfella

AudiChris wrote: »

The collapse in secondhand car values caused (mostly) by the change in the VRT system is what has the motor industry in the state it's in at the moment.

That and the squeez from the banks on consumers.
But the Green Party have a lot to answer for with their policys.:mad:

L-M

niceirishfella wrote: »

That and the squeez from the banks on consumers.

+1

People in there hundreds and hundred getting turned down for finance, where are this time last year/ year and a half ago every Joe Soap could get credit.

niceirishfella

How many poor sods lost their jobs in Newlands so?
I hate hearing about this sh1t, my mate's little dealership went to the wall a while back. He's now in a depressive reclusive state and tbh, I'm quite worried for him.
This island is going down the sh1tter and quick.

-Chris-

AudiChris wrote: »

The collapse in secondhand car values caused (mostly) by the change in the VRT system is what has the motor industry in the state it's in at the moment.

BlackWizard wrote: »

I dunno, I think the recession had a big affect on the motor industry.

Damien360 wrote: »

I thought every buisness had worked that one out already. I cannot believe anyone thinks VRT is the cause.

To clarify my position:

The VRT change, the reduction in available credit, the worsening of the economy and the decrease in consumer confidence all affected the secondhand values for cars.


My point is that (in the context of a thread about dealers closing down) the reduction in available credit, worsening of the economy and decrease in consumer confidence had a big effect on used values.
Dealers could have managed their way through this as it would have been semi-gradual and semi-anticipatable.


The VRT change however was a blunt instrument that was man-made and had an immediate effect on all stock on the ground - both customer's cars and dealer stock.
In a four or five month period in early/mid 2008 (before the downturn got severe) we saw thousands of Euro being wiped off the value of used cars because the new cars dropped in price and because the VRT on a lot of imported cars dropped.



Soooo, what I meant by "caused (mostly) by the change in the VRT system" is that, in chronological order:

-The change in the VRT system took the momentum out of new car sales in the first half of 2008 as people waited for the new pricing to come out.

-The value of most used cars dropped because the price of their new equivelants dropped - this happened in Q2 & Q3 of 2008

-The price of importing the most popular cars from the UK dropped. Private punters took advantage of this immediately, while main dealers were slower on the uptake due to fears of a slap on the wrist from their distributor. This happened from Q3 onwards.

-A lot of people who waited for the new pricing for 1st July then said "I think maybe I'll wait 'till 2009, this year is half gone already".

-The value of existing dealer stock dropped and dealers started selling used cars at a loss, and taking in trade-ins at a lower price - Q3 & Q4 2008.

-At this stage a lot of "Celtic Tiger" car buyers were in negative equity and so facing big costs-to-change for their next car.

-<insert massive number of bank revelations here> took place in Sept when the global economy was already slowing down.

-Banks drew in their credit facilities while they worked out how to weather the storm.

-Due to the lessening of credit facilities, house buying dropped and people started seeing negative equity - Q4 2008. People started getting scared and stopped spending on anything major, if they could even get a loan.

-Car sales fell further due to consumer sentiment and reduced credit.

-January came and there was no pick-up from the market, dealer closures accelerated as banks put on the squeeze.


There are many factors that are affecting businesses at the moment, but none were as immediate or blunt as the VRT change - wiping hundreds of thousands of Euro off dealers' stock.
Imagine the Gov't had increased the VAT on computers to 40% on the first of July last year and then you saw PC World closing down. A lot of it could be attributed to the downturn in demand, but you can't ignore the massive, direct impact of the change in pricing.


Obviously there's a bigger picture going on in the macroeconomy, but this is how I see it from the dealership floor.


My 2c

niceirishfella

Your 2c is a good considered one Chris.
Long tho' - things must be quiet in the dealership today like everywhere?

-Chris-

BTW - I don't want my post or the discussion of VRT to derail this thread - I'm very sorry to hear Newland's Renault and their staff are in this position.

niceirishfella wrote: »

Your 2c is a good considered one Chris.

Thx

niceirishfella wrote: »

Long tho' - things must be quiet in the dealership today like everywhere?

It's Tuesday morning - it's never been a busy time for retail.

Update: It's Tuesday morning in a recession - it's very quiet.

Update to update: It's Tuesday morning in a recession in a car dealership trying to sell a luxury brand - I can think of better things I'd like to be doing right now...

R.O.R

AudiChris wrote: »

BTW - I don't want my post or the discussion of VRT to derail this thread - I'm very sorry to hear Newland's Renault and their staff are in this position.



Thx



It's Tuesday morning - it's never been a busy time for retail.

Update: It's Tuesday morning in a recession - it's very quiet.

Update to update: It's Tuesday morning in a recession in a car dealership trying to sell a luxury brand - I can think of better things I'd like to be doing right now...

But the sun is shining, and at the moment I'm being thankful for all mercies, small or not

plus, I've just won a 300+ car fleet from a major bluechip

ninty9er

I take the point re: VRT, but the delaerships that appear to be surviving best are the ones that rolled with the times and are selling at an acceptable post VRT price as opposed to knocking 2/3k of a car that could be bough new for more or less the same price.

Yes it was a blunt instrument, but I think blaming it for putting people out of business is a bit far fetched. If I've learned one thing from strategic management this semester it's that environments don't close business, business models do.

-Chris-

ninty9er wrote: »

I take the point re: VRT, but the delaerships that appear to be surviving best are the ones that rolled with the times and are selling at an acceptable post VRT price as opposed to knocking 2/3k of a car that could be bough new for more or less the same price.

Yes it was a blunt instrument, but I think blaming it for putting people out of business is a bit far fetched. If I've learned one thing from strategic management this semester it's that environments don't close business, business models do.

I don't want to turn this into the politics forum, but I do have to ask "what is the government's business model?".

Businesses like Newlands Renault are going out of business due to the MASSIVE f*ck up that's been made of our prosperity by an under-experienced and ill-epuipped government.

They are so deep in lobby groups and special interest groups that they're unable to make any meaningful decision that will give anyone confidence to open their wallet.
Butchers, bakers and candlestick makers will all go out of business in the next 12 months, car dealers are just the first to go because that's the way it always is with a recession.

If any representative of any of the government parties comes knocking on my door in the next few months I won't be long in releasing the hounds.

Drummerboy08

R.O.R wrote: »

But the sun is shining, and at the moment I'm being thankful for all mercies, small or not

plus, I've just won a 300+ car fleet from a major bluechip

Jammy ********! Who???!

L-M

Drummerboy08 wrote: »

Jammy ********! Who???!

LOL! Jammy is right:pac:

niceirishfella

AudiChris wrote: »

Businesses like Newlands Renault are going out of business due to the MASSIVE f*ck up that's been made of our prosperity by an under-experienced and ill-epuipped government.

Thats it in a nutshell really. And they're in bed with a green party who's policies we call ill afford right now.
Like, Electric Cars is that next big thing "in their head" - like no one is buying any cars right now,let alone electric sh1tboxes.
But its the future,according to them.:rolleyes:
If the dealt with the here and now,and did'nt engage in their far off "green" fantasy vision they have for this state, we'd be a lot better off sooner.

Saab Ed

niceirishfella wrote: »

Thats it in a nutshell really. And they're in bed with a green party who's policies we call ill afford right now.
Like, Electric Cars is that next big thing "in their head" - like no one is buying any cars right now,let alone electric sh1tboxes.
But its the future,according to them.:rolleyes:
If the dealt with the here and now,and did'nt engage in their far off "green" fantasy vision they have for this state, we'd be a lot better off sooner.

They might think electric cars are the future but the Grid isnt.

PS. Got my first chance to boll**k a canvaser last night for FF. He was told to get the fu*k out and tell all his other headless chickens to stay away too......felt very good

greendom

AudiChris wrote: »

I don't want to turn this into the politics forum, but I do have to ask "what is the government's business model?".

Businesses like Newlands Renault are going out of business due to the MASSIVE f*ck up that's been made of our prosperity by an under-experienced and ill-epuipped government.

The prosperity of the last few years was mainly an illusion anyway, built on a mountain of debt that was always going to landslide at some point

If any representative of any of the government parties comes knocking on my door in the next few months I won't be long in releasing the hounds.

I'd have a thing or 2 to say as well but i'd doubt they'd have the balls

roosterman71

Saab Ed wrote: »

They might think electric cars are the future but the Grid isnt.

PS. Got my first chance to boll**k a canvaser last night for FF. He was told to get the fu*k out and tell all his other headless chickens to stay away too......felt very good

I'm looking forward to perspective councilors dropping by. Unlike other times when I dreaded it. My neighbour is running for Fine Gael in this years locals. Can't really give him abuse though. Its his 1st attempt, and he's not FF or Green

Owen

R.O.R wrote: »

plus, I've just won a 300+ car fleet from a major bluechip

Woot Go you! Find my transit connect yet??

Darragh29

If you did the post mortem on some of these businesses that are failing in the motor industry, you'll find that the people behind the business had gotten their businesses involved in property development and thought they were all onto a winner when they started meddling in property. If they stuck at what they were good at, you'd probably find that they would be much better positioned now to weather the storm.

At least two owners of large dealerships that I know of, that have gone bust, were running around the place building houses on sites and trying to build a property empire, while their core motor business were being left to run themselves. Then when they had to try to adapt their motor business to manage in a new sales environment when the alarm bells started going off, they discover that their aftersales operations have been losing money all along, and the sales department was carrying the whole operation. So when sales went off a cliff, their whole business went going off the cliff also...

pppspecial

Very sad to hear this news. good guys to deal with.
Times are tuff out there and its gonna get worse before it gets better.

niceirishfella

Darragh29 wrote: »

If you did the post mortem on some of these businesses that are failing in the motor industry, you'll find that the people behind the business had gotten their businesses involved in property development and thought they were all onto a winner when they started meddling in property. If they stuck at what they were good at, you'd probably find that they would be much better positioned now to weather the storm.

At least two owners of large dealerships that I know of, that have gone bust, were running around the place building houses on sites and trying to build a property empire, while their core motor business were being left to run themselves. Then when they had to try to adapt their motor business to manage in a new sales environment when the alarm bells started going off, they discover that their aftersales operations have been losing money all along, and the sales department was carrying the whole operation. So when sales went off a cliff, their whole business went going off the cliff also...

All true, and when NAMA gets established and going, there will be more dealership closures too due to some of these business's or the property they are on being used a security for loans to develop the property portfolios of these people. We all know who they are too.:eek:
Nasty times ahead.