Saturday 19 April 2014

One in three car dealers in crisis

ONE in three Irish car dealerships faces closure within five years due to the escalating crises over franchise costs and rising VAT, VRT and road tax.

The revelation came as motor industry officials warned that Budget 2013 tax hikes will make Irish cars the most expensive within the EU.

Irish motorists are already paying, on average, up to 19pc more for cars than French or German drivers – coupled with vastly higher operating costs.

Two of Ireland's highest profile dealerships, the Bill Cullen Group and Rathdown Motors, are having financial problems.

Rathdown in Dublin is shutting down at the cost of 18 jobs after 25 years in business. The Bill Cullen Group was placed in receivership two months after losing its Renault franchise.

The Society of the Irish Motor Industry (SIMI) estimates that just 75,000 new cars will be sold in 2012 – less than 50pc of the total of 151,000 sold in 2008.

The figure is also down on the 90,000 new cars sold in 2011.

There are fears that sales could plummet to 60,000 units next year with the Government ruling out any further scrappage schemes.

The SIMI warned that current sales figures simply cannot sustain the industry given the estimated €385m income drop.

A leading Irish car dealer, George Mordaunt, said that, by 2017, Ireland will see its car dealerships drop to around 350 nationally, down on the Celtic Tiger era peak of almost 1,000.

"I know of at least 12 major dealerships hanging on by their fingernails. I'm afraid that these measures are going to drive a lot of dealerships over the edge," Mr Mordaunt told the Irish Independent.

Irish Independent

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