A MAJOR UK car trader has been hit with millions in losses and is set to delay new branch openings.
Motorpoint, a used car market place, is battling a staggering £3.7million blow amid a sting of dealership closures across the UK.
The industry giant, which runs 20 UK sites, has been forced to let staff go as well as delay new store openings to try and combat dwindling funds.
And, Motorpoint shares have fallen by a third in the last six months, as reported by Car Dealer Magazine.
In their efforts to “streamline” the firm, Motorpoint bosses say they took “swift” action to “reflect the reduced market size and ensure cash generative trading at lower levels of group sales”.
Mark Carpenter, CEO of Motorpoint, added: “The impacts of high inflation, interest rates, and consumer uncertainty continue to affect demand for used cars.
“We have responded by reducing our cost base and expanding our retail criteria to help customers find the car of their choice at a price they can afford.”
A Motorpoint spokesperson summarised the actions the company took included “increasing retail margins”, “reducing auction fees”, “streamlining our organisational structure” and “reducing discretionary capital spend.”
The used car dealer group have also added motors up to five years old onto the forecourts with up to 50,000 miles on the clock.
Despite multi-million losses, Motorpoint remained positive and highlighted they made £11million in the first half of 2023.
Additionally, they successfully came back from a £3.1million loss in their first quarter, to £600k in the second, as told to the London Stock Exchange.
“We have successfully preserved cash while making progress on selective strategic initiatives, and are well positioned to emerge from this difficult macroeconomic cycle a leaner and more agile business, ready to seize the significant opportunity as market conditions improve,” added the Motorpoint CEO.
Motorpoint’s halt of new store roll outs comes as many other car dealerships faced the same fate.
A major dealership closed down after 30 years of business – blaming a popular car brand’s failures.
Autovogue, based at Stableford in Staffordshire, said it spent £198,000 repairing Jaguar Land Rover motors last year.
The used-car dealer slammed JLR’s “poor manufacture” and “failing” cars in a statement on its website.
Meanwhile two companies are set to close down imminently as bosses cite a “changing marketplace” as a key factor.
The move came after the showroom’s franchise owners cut ties with a big-name manufacturer.
And, many second hand electric car forecourts are worried they will meet the same end soon.
New research revealed the average price of used EV’s has plummeted by nearly a quarter.
Elon Musk’s popular Tesla brand has been one of the worst affected, as well as other high-end models from BMW and Mercedes-Benz.
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Many motor experts are attributing the slash in costs to drivers losing confidence.
