7:19 am, September 2, 2026
A family-run car dealer has warned that soaring employment and supplier costs are putting increasing pressure on dealers because vehicle margins are failing to rise at the same pace.
Will Blackshaw, director of Northumberland-based Blackshaws, says the cost of running the business has climbed rapidly over the past two years, with higher wages feeding through into price rises from suppliers.
Speaking on the Car Dealer Podcast, Blackshaw said the group had been hit by a succession of cost increases which were proving difficult to offset through vehicle sales.
He said: ‘It felt, for the next three to four months, every email or letter from a supplier was a cost increase, cost increase, price increase…
‘But of course this filters through every supplier that you use. So every cost went up over the space of two years, and very, very quickly. I don’t see it slowing down.’
Blackshaw said the challenge for dealers was that the margin available from selling cars had not risen in the same way.
He added: ‘My concern is the margin of selling vehicles doesn’t increase in line with that.
‘You are governed by how much, and then obviously you want to sell more to offset that, but then you’ve got to be price competitive, so your margin doesn’t ever increase.’
You can listen to the podcast here.
The comments come as dealers continue to grapple with higher employment costs following increases to the minimum wage and employer National Insurance contributions, alongside broader inflationary pressures.
For Blackshaws, which operates sites in Alnwick and Morpeth representing Suzuki, MG and Mitsubishi, the answer has been to scrutinise spending across the business rather than pursue aggressive expansion.
Blackshaw said marketing had been one of the biggest areas to come under review, with the group investing in better tracking to understand exactly where enquiries originate.
The dealer now uses UTM tagging and separate phone numbers across advertising channels to assess which platforms are actually delivering leads and sales.
Blackshaw said the business had also dropped an approved repairer agreement for another brand as part of efforts to simplify the operation and reduce costs.
He added: ‘We’re never going to find anything that saves us a fortune, but if you can save two or three hundred pounds there, there and there, and multiply that then that’s a £36,000 saving a year.’
The dealer is also investigating whether AI could reduce some third-party call-handling costs, although Blackshaw stressed that the move would not be about reducing staff numbers.
Despite the pressure on costs, he said Blackshaws remained stable, with vehicle volumes currently ahead of last year.
The business also enjoyed what Blackshaw described as its best March financially in its 107-year history, helped by a strong Suzuki campaign.
However, he expects some of that demand was brought forward and said the focus for the remainder of the year was on maintaining performance rather than chasing unrealistic growth.
He said: ‘We’re doing okay. Not growing, not shrinking, just maintaining.’
Elsewhere in the interview, Will Blackshaw discusses:
- How the MOT price freeze risks standards slipping as costs soar
- Adding more Chinese brands to the business is not an option
- How Mitsubishi customers stayed loyal despite brand’s five-year absence
Along with the chat with Will Blackshaw, hosts Jon Reay and James Batchelor discuss the week’s biggest news stories. You can listen to the podcast on your favourite streaming services.