Huge car brand closes and sells off ALL UK dealerships after suffering ‘heavy losses’
A HUGE car brand has been forced to close and sell off all its UK dealerships after suffering “heavy losses”.
Mercedes-Benz Retail Group‘s annual accounts revealed the group has “disposed of its remaining leasehold premises” after years of struggling financially.
The documents, filed via Companies House, show the group has been settling its debts with a view of ceasing trading soon.
They also revealed directors should “not expect any further future trading activity” with the company.
This follows years of financial blows, including a £35 million loss in 2019 and a £20.9 million loss in 2020.
Confirming the latest news, director Wolfgang Pipperger said: “During the period, the company sold its remaining dealerships at which point the company ceased to trade.
“After the reporting date, the company disposed of its remaining leasehold premises, recovered its remaining trade and other receivables and settled any outstanding trade and other payables with a view to move the company into a dormant status.
“The directors do not expect any further future trading activity within the company.”
This follows the closure of a Mercedes-Benz dealership in Bradford late last year.
The dealership, which was around for 70 years, announced it would cease trading on October 31.
The closure came as dealership group Stratstone began the brutal task of closing some of its sites – months after it was acquired by Lithia Motors.
The US giants picked up Stratstone and Evans Halshaw in February after completing its takeover of Pendragon in a huge £397 million deal.
Then, in April, it was reported that Lithia had cut around 250 jobs by binning off used car supermarket brand CarShop.
Since then, Stratstone’s network of sites has been largely unaffected until now – which has seen Mercedes-Benz of Bradford joined by the Tyneside BMW and Mini dealership.
Another ex-Pendragon site – Evans Halshaw Ford Northwich – also closed its doors.
According to the Stratstone website, the Bradford-based dealership opened in 1953 and was the first dealer and distributor for all Mercedes vehicles in the North of England, and is the oldest in the UK.
It stood at its original site until it was destroyed in a fire in 1963; then the business moved to Thornton Road, where it remained until its closure last week.
Why are so many car dealerships closing down?
By Summer Raemason
According to Business Rescue Expert there are multiple reasons why car dealerships are folding across the UK.
The first major factor is rising online car sales which are beating in-person sales at dealerships.
With an extensive range of comparison and second-hand sites to chose from, may car buyers don’t even step foot into a dealership anymore.
Secondly, the actual cost to physically run the sites has soared.
Rent, wages and energy bills have all been increasing for roughly the past five years, putting many out of pocket.
Car manufacturing across the globe was also hit by a semiconductor chip shortage in 2022 which made it difficult to produce new motors.
The high demand with limited supply created a backlog, which although has eased, is still having an impact on the industry.
A third reason for recent closures is the shift to electric cars.
They are becoming more popular, given the Government initiative to be Net Zero in 2050.
The industry is also affected when companies merge or are bought by rivals.
This may lead to some independent names falling victim to the ongoing spate of closures.