The UK’s largest car dealer group, Pendragon PLC, has announced that it expects to make a loss of £30m this year because of falling car sales. It is planning to close 75 of its chain of dealerships, and make up to 2500 people redundant.
Pendragon has seen a 12 per cent drop in sales over the last year, with registrations falling by 21.4 per cent in the last three months alone.
Pendragon, which recently took over Reg Vardy and whose outlets include Stratstone, Evans Halshaw and Chatsfield, is already implementing cost-cutting initiatives to the tune of £60 million.
The dealer group’s share price has dropped from 60p at the start of the year to under 6p today.
"Assuming no significant further downturn in economic activity between now and the year end, we expect to report a full year loss before exceptional items for 2008 of £30m," the company said in a statement.
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Re: Job cuts at UK's biggest dealer group
About 2 years ago I tried to buy a 60K RR Sport from a Pendragon dealership, the pre-sales and sales experience was so bad, it made me wonder (after trying to buy for 4 months) if this was the service they offer when trying to buy a car - what would it be like afterwards. I went a bought a Porsche instead. Where I enjoyed superb service through the sales process and afterwards. I am now buying another. While Pendragon are suffering from the economic downturn there is a deeper problem at the heart of the organisation.
Re: Job cuts at UK's biggest dealer group
It's not good anytime people lose thier jobs and in particular in the current climate, I feel for anyone who lose thier jobs.
However some of the mess the car manufacturers and dealers find themselves in now is thier own doing- there are consequences to ones actions:
DEALERS:
1) Cheap /Inventive finance- basically no different than the mortgage market dealers have been putting people into cars that they really can't afford. New finance deals have meant that people have been put in cars that are realistically out of thier price range.
That was all fine and well but now that the market has collapsed you find people stuck with cars they don't want or it is not economicaly viable to P/X.
2) Bad service- very few dealers in my experience deliver good service. At time of purchase you are promised the earth, the literature promises a new customer experience in after sales car but it is not really delivered.
3) Sales technique- there is too much gamemanship and 'flexibility' with the facts. I am amazed at the amount of sales staff that don't seem to know the products they are selling!. Also failure to be open with customers about model/spec changes.
Manufacturers:
1) Failure to adapt. Too many manufacturers have failed to see or more importantly act on a changing demand and one the legislation and economics have have forced quickly on consumers.
2) Too many products. Manufacturers have started producing huge amount of models/marques creating niches within niches- fine during a boom but a hinderence at times of slow growth.
Unfortunately the goverment has decided to introduce legislation to penalise car owners too quickly and too harshly based on 'green' policies.
At the same time oil prices peaked, causing the problem to multiple and finally the credit crunch has meant people just cannot/will not change cars as they are huge expenses on a household budget.
The car industry will get throug it but I feel with fewer staff, marques and tighter fiscal policies.
Re: Job cuts at UK's biggest dealer group
I worked for Reg Vardy when it weas taken over by Pendragon, all the good people left because of the penny pinching and cost cuting