Thursday 23 March 2017

Fears of further closures after car firm fails

Ailish O'Hora

Ailish O'Hora

CAR experts have warned that the collapse of car firm McKeon Motors and financial problems at another Volvo dealership this week may not mark the end of troubles in the industry.

Cashel Motors in Co Tipperary has called a creditors' meeting for July 29 to appoint a liquidator to the firm -- just days after McKeon Motors went bust in Kells, Co Meath.

Alan Nolan, director general of the Society of the Irish Motor Industry (SIMI), said that while the car scrappage scheme had boosted car sales, there could be more dealership closures.

"The scheme did protect jobs but it is not a silver bullet," he said.

The scrappage scheme, which offers vehicle registration tax relief of up to €1,500, was introduced by the Government in January in a bid to boost the industry.

As a result, new car sales were up 45pc year-on-year to 67,846 by the end of June9.

Fragile

Mr Nolan said he was hopeful things would not go back to the bad days of 2009 when 100 dealerships folded with the lost of 10,000 jobs.

But he added the recovery is still very fragile.

Cashel Motors, which sells Volvo, Citroen and Peugeot cars, is the second car dealership to run into trouble this week and has said it may not be able to survive

Creditors are owed millions, according to the most recent accounts for the company which lists David Wallace as the majority shareholder.

The figures show that the company owed creditors just under €6m at the end of 2008.

The auditors said that at the end that year, debts exceeded its assets by €910,502.

Notes to the accounts stated that a number of banks and financial institutions have taken charges on the companies assets, including property.

Bank loans and overdrafts at the company totalled more than €2m.

Earlier this week, the High Court appointed Paul McCann of accountancy firm Grant Thornton to McKeon Motors.

Irish Independent

Promoted articles

Editor's Choice

Also in Irish News