Third of car dealerships ‘at risk’

A third of all car dealerships could be in danger of collapse, according to a survey of the industry.

The probe — of nearly 2,300 companies in the motor trade — undertaken by business intelligence provider, Vision-net, found that 33% were showing signs of business failure, with another 18% at medium risk of collapse. Almost half (49%) however were deemed to be at a low risk of failure.

However, Alan Nolan, the director general of the Society of the Irish Motor Industry (SIMI) accused Vision-net of engaging in a cynical marketing exercise that could damage car retailers during an important sales period.

“We are very concerned that this is a cynical marketing ploy to sell their company look-up service. This is a crucial sales period for the car industry, 70% of all car sales are in the first half of the year,” he said.

Vision-net felt that its findings warranted a warning to motorists planning on buying a new car to check how the dealership is performing before purchasing.

“This is important, because most dealerships give warranties, so the buyer should check whether the business is likely to still be there should they need to bring the car back for repairs. Equally, someone considering setting up a business in the motor trade should first research demand across the industry and check how others are performing,” according to Christine Cullen, managing director of Vision-net.

However, Mr Nolan said: “This is just scare mongering to encourage people to use their service. The warranty is given by the manufacturer and if a dealership closes the warranty will be valid in any other dealer within the manufacturers network,” he said.

Vision-net’s survey was published just a day after data from the SIMI showed a 14% year-on-year fall in new car sales during the first quarter of this year — with the Volkswagen Golf the best-selling model during the period but other popular marques like Renault, Toyota and Ford suffering the biggest losses.

It also follows some recent high-profile closures across the industry, including the Bill Cullen Motor Group, Merlin Motor City, Appleyard Motors in Dublin and the EP Mooney Car Group.