Staycationing Scots drive up demand as car dealerships reopen doors
Vertu Motors, the car dealership group with a dozen Macklin Motors showrooms in Scotland, has seen a surge in demand since physically reopening its doors as families plan staycation breaks and shun public transport.
Chief executive Robert Forrester pointed to “strong pent-up demand” for vehicles across a range of price points, highlighting the group’s Glasgow central Nissan dealer as the highest performing used-car operation in the opening days of July.
The chain reopened its Scottish dealerships at the end of June, almost a month behind England, with a series of measures ushered in to comply with Covid-19 guidelines, including physical distancing signage and “touch free” greetings replacing handshakes.
Test drives are now undertaken alone, with sales executives following in a separate vehicle. Face masks, single-use gloves and hand sanitiser have also been made available to customers and staff.
Speaking ahead of a planned tour of the Scottish operations, Forrester said: “Scotland is following the same pattern as England with really robust demand.
“People are planning stay-at-home holidays and there are definitely people with driving licences buying cars that don’t have one already.”
He said that while the internet was a useful resource for researching and specifying car options, “pure” online retailing – with no human interaction prior to delivery – remained modest in its impact, despite doubling in size.
“You can reserve a car online, which is helpful, and we have seen a big jump in internet and phone enquiries,” Forrester added. “In England, ‘walk-ins’ are recovering as people gain more confidence.”
Vertu, which has a network of 133 sales and after-sales outlets across the UK, last month reported full-year pre-tax profits of £23.5 million, only slightly down on the year before. Like-for-like revenues rose 1.2 per cent over the year.
Highlighting its strong balance sheet and low debt levels, the group told investors that it was “very well positioned” to target any growth opportunities.
Forrester added: “There are some dealerships closing and that’s clearly part of the pressures that have been around for some time, but we are not closing any of ours. Businesses that went into this crisis with high levels of debt are struggling more than those that have cash.”
He said the UK government had “done an exceptional job” in terms of business support during lockdown.
“Few companies would have survived if it wasn’t for the furlough scheme,” he noted. “For many, it was make or break. We have also benefited from a £10m saving on rates on our showrooms.”
He said the group was not planning any sweeping changes but would look at “every single business” and areas where “we can make ourselves more productive”. It has been taking on some extra bodies at its Gateshead HQ.
Earlier this week, industry figures pointed to a “tentative restart” in new car sales last month as registrations fell by 34.9 per cent, far less than the previous two months.
There were 145,377 cars registered across the UK in June compared with 223,421 during the same month in 2019.
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