11:21 am, August 1, 2023
Peter Vardy Group is proposing to close two used car supermarkets as it counts the cost of dwindling supply and used electric car demand.
The family-run Scottish dealer group said today (Aug 1) it was looking to shut its large, purpose-built ‘Peter Vardy Carz’ supermarkets in Dundee and Glasgow, pictured, marking a shift away from used cars and bolstering its new car franchise offering.
The news comes as Peter Vardy Group has signed a deal with MG Motor UK to represent the brand.
Of the six remaining Carz sites, Kirkcaldy and Edinburgh will become MG dealerships, opening this month, while Grangemouth, Perth and Motherwell will take on the Chinese all-electric brand Ora.
CEO Peter Vardy told Car Dealer the closures were the result of a number of external factors, including short supply and mix of second-hand cars, as well as poor demand for used electric vehicles.
Some 255 roles are affected by the closures, but Vardy said 114 positions had been created across the wider business. The proposal period will last 30 days.
The government agency Pace (Partnership Action for Continuing Employment) has been appointed to provide additional support, a statement from Peter Vardy Group said, while the firm’s welfare team will also be made available to staff.
The Peter Vardy Foundation – which was created to distribute 10 per cent of Peter Vardy Ltd’s profits to good causes – will also be on hand to offer financial aid to any affected employee.
In the statement, Vardy said: ‘While the decision to close our used car supermarkets is tough for us all, we firmly believe that reallocating resources, funds and talent to the growing divisions within the group will bolster long-term prospects for the business and its colleagues.’
Customers of the Glasgow and Dundee businesses will be contacted over the coming days.
‘Not enough used cars’
Speaking exclusively to Car Dealer, the dealer group boss said the company was moving with the market.
‘We’re closing these sites because they are big – we can’t get the supply of used cars that is required to achieve our business plan.
‘The issues affecting the used car market aren’t a short-term thing.
‘Based on car manufacturers’ behaviour since Covid in not over-producing new cars, we can’t see it turning around to be able to achieve the turnover that’s required.’
Vardy explained that for his remaining Carz sites, he has also been able to bolster his bottom line with service work as well as by adding the new car sales operations.
‘You can’t bank on an oversupply of new cars any more, and we have found we can’t buy enough older used cars for a number of reasons.’
He said car supermarkets aren’t ‘set up’ for huge prep bills and can’t set aside time for preparation, plus there is a lack of technicians who want to work outside of the franchise dealer sector.
‘We’re also not seeing demand for electric used cars anything like the supply of used electric cars coming into the market.
‘It will find a base but I don’t know how long we will have to wait.
‘We can’t stock older cars and we can’t stock electric vehicles as much, and then everyone is competing for the vehicles that are left.’
Commenting on the wider used car sector, Vardy said: ‘I think larger-scale supermarkets – and indoor supermarkets in particular – have got significant challenges.
‘We haven’t gone 100 per cent down the used car supermarket route – if we had, this would be a very different announcement.
‘We’ve got four divisions – luxury cars, CarMoney, Carz and Mobility – and the divisions other than used are all performing extremely well, but we need to fix the division that isn’t performing as well.’
Vardy added: ‘This is an extremely upsetting decision to be taking, and we are going into so much detail with colleagues to make this as pain-free as possible.
‘I am hoping our colleagues, moving forwards, will have much better prospects if I can invest money where they and the group can get a better return on their earnings and their creative element.
‘In car supermarkets at the moment – and this will be the same all over the country – when they are struggling they are not much fun to work in; you are not thinking of your career prospects and you’re not really earning any bonus, and talented staff will leave.
‘So, if I can move them into a division and businesses that can give them a return and career prospects and bonuses, everyone will grow faster.’
Peter Vardy will be a headline interviewee at our Car Dealer Live conference in Gaydon on March 7, 2024. Get your tickets here.
