8:42 am, September 16, 2024
The automotive industry could soon be facing a ‘trade war’ with the potential to hit dealers in the pocket if the UK follows Europe’s example and imposes tariffs on EVs imported from China.
That is the warning from bosses at Car Dealer Top 100 retailer Vospers, who believe that such measures would not assist the UK’s ‘drive to electrification’.
The comments come as the firm published its annual accounts with Companies House, which revealed tumbling profits, despite a rise in turnover.
The accounts, covering the 12 month period ending December 31, 2023, showed that the Plymouth-based outfit made a pre-tax profit of £1.03m last year.
That figure represents a whopping decline of almost 80% on 2022, when the dealer group reported a profit of £4.97m.
EBITDA – the measure by which the Car Dealer Top 100 list is calculated – also slipped from £6m to £3.6m.
The disappointing result was achieved against a turnover of £270.28m, which was up 7.2% on the previous year’s £252.08m.
Bosses say the figures were heavily affected by a worse than expected second half of the year, which came as a result of a ‘lagging private retail new car market in the BEV sector’.
Directors therefore warned the new Labour government against imposing additional tariffs on challenger brands from China, similar to those introduced by the EU.
Boss Peter Vosper also called on Kier Starmer’s administration to work with the motor trade in relation to the timing of the upcoming ban on the sale of new petrol and diesel cars.
Reports over the weekend suggest that Labour will water down its plans to return to the 2030 date by allowing hybrids to remain on sale until 2035.
Writing in the accounts, Vosper said: ‘This result has been affected by a worse second half of the year as a result of a lagging private retail new car market, particularly in the Battery Electric Vehicle segment.
‘According to the NFDA 62% of buyers stated that they would not buy a BEV citing price as the major factor.
‘This has not been helped by the announcement from the previous government on the ban on internal combustion engines being delayed to 2035 and we hope that with the new government, having committed to bring the date back to 2030, will confer with the motor trade federations to achieve this change.’
He added: ‘The recent announcement from Europe regarding tariffs is concerning as many of the components of these cars are built in China and this has the potential to start a trade war.
‘This also will not assist the drive to electrification if similar tariffs are instigated in the UK.’
Results season so far…
- Eastern Western sees profits slide as Mercedes’ agency sales model sucks £50m from revenue
- Listers becomes latest car dealer to see profits tumble as shrinking margins hit
- Family-run Vindis Group sees profits wiped out but bosses ‘satisfied’ with performance
- Bosses at family-run Vospers warn of automotive ‘trade war’ as profits slump in latest accounts
- John Clark Motor Group breaks £1bn turnover barrier but pre-tax profit sinks by almost 10%
- Hartwell bosses happy with ‘strong financial performance’ despite 70% slump in profits
- Holdcroft directors award themselves 345% pay rise as profit takes a tumble
- Vines Motor Group sees profits slump as bosses blame wider economic factors
- Car dealer group Parkway is the latest retailer to see profits wiped out as firm takes 75% hit
- Lloyd Motor Group’s annual pre-tax profit falls despite upturn in revenue
Accounts show year of change
Elsewhere in its accounts, Vospers revealed that the vast majority of its improved turnover (£259.69m) was generated from the sale of vehicles and parts, with servicing and repair work bringing in an additional £10.58m.
Meanwhile, the company’s workforce rose from 588 to 601, contributing to staff costs rising to £20.54m compared to £18.89m in 2022.
At the top of the firm, directors’ remuneration fell from £762,051 to £710,340, with the highest paid director receiving £181,296, down from £216,926.
Also declining was Vospers’ return on sales figure, which slipped from 2.0% to just 0.4%.
The year also saw significant changes to the group’s dealer network, with the outfit axing Nissan and Renault dealerships, while taking on its first Vauxhall site.
The company also invested heavily to bring Vaxuhall, Peugeot, Fiat and Abarth under one roof in Plymouth.
Those changes have continued into 2024 with the outfit now also representing MG in Plymouth, as well as Jaecoo and Omoda in Plymouth, Exeter and Cornwall.
Results season so far…
- Eastern Western sees profits slide as Mercedes’ agency sales model sucks £50m from revenue
- Listers becomes latest car dealer to see profits tumble as shrinking margins hit
- Family-run Vindis Group sees profits wiped out but bosses ‘satisfied’ with performance
- Bosses at family-run Vospers warn of automotive ‘trade war’ as profits slump in latest accounts
- John Clark Motor Group breaks £1bn turnover barrier but pre-tax profit sinks by almost 10%
- Hartwell bosses happy with ‘strong financial performance’ despite 70% slump in profits
- Holdcroft directors award themselves 345% pay rise as profit takes a tumble
- Vines Motor Group sees profits slump as bosses blame wider economic factors
- Car dealer group Parkway is the latest retailer to see profits wiped out as firm takes 75% hit
- Family-run Masters of Beckenham admits ‘concerns’ about Kia relationship as profits tumble
Vosper added: ‘Whilst we parted company with a Nissan and a Renault dealership at the beginning of the year we also acquired our first Vauxhall dealership in Plymouth in February.
‘With the advent of a number of Stellantis houses that operate all of their brands from the same location we decided to move Peugeot, Vauxhall, Fiat and Abarth alongside each other at our Plymouth site.
‘This has been a significant investment in these brands bringing them up to the latest corporate standards. This has created some trading challenges whilst these changes were being made and Vauxhall is now performing at national levels.
‘We recognise that there are a number of low-cost entrants into the marketplace with more affordable internal combustion engine, hybrid and electric cars and with the cost of living crisis consumers are considering other products.
‘As a result we agreed to represent MG in Plymouth and Omoda and Jaecoo in Plymouth, Exeter and in Cornwall.’
