Car Trade in Trouble – Plan B in operation!
We found this story below and it highlights one very important facility that businesses need. Always have a plan B. Car dealerships, make their money by selling cars (duh!) in the good times, however, in the bad times, they make their money fixing and servicing cars.
By having two sides to their business, they protect their income from the downsides of the economy. You will see this in action in other businesses as well.
8:02 am, October 30, 2008
Lookers says trading is ‘very difficult’
Manchester-based car dealership chain Lookers (LSE: LOOK) today said its new car sales were falling in line with the declines reported by the Society of Motor Manufacturers & Traders.
The SMMT said sales were down 21 per cent in September and 19 per cent in the third quarter.
However, Lookers insisted that its aftersales business, including parts distribution and servicing, gave it the flexibility to adapt to challenging trading conditions.
In a management statement issued to the stock market, chief executive Ken Surgenor said: “Trading conditions are currently very difficult and the outlook for the industry for the remainder of the year remains challenging.
“However, we have a strong presence in aftersales and a proven management team with huge experience of successfully trading through previous market slowdowns. We continue to maintain our long standing focus on driving operational excellence and efficiency and to take action where appropriate for the long term benefit of the company.”
Lookers said it remained cash generative and that it had “adequate banking facilities in place for the medium term”.
Originally posted 2008-10-31 10:39:25.
