The UK’s motor trade industry has been extremely positive this year as new car sales have risen month on month. However, this week the Scottish Motor Trade Association (SMTA) announced that new car sales have slowed this month, with 19,254 units sold. At the same time, even though the amount was lower than expected, it is still 1.35% more than in June the previous year, meaning that the market in general is improving.
Discussing last month’s car sales, SMTA chief executive Douglas Robertson said: “We are pleased that once again our new car registration figures in June show a further increase. Perhaps not as large as we would have liked but we are happy that we are almost 10% up in the first six months of the year. We anticipate more stabilisation in the remaining half of the year with a year-end figure of around 217,500. Sales have been driven by the private sector with almost 55% of new registrations in the first six months of the year being to private buyers seeking, for the most part, more fuel efficient vehicles and we think this is a trend that will continue for the remainder of the year.”
In total, there have been 228,291 vehicles registered in the UK so far this year, which is 6.2% more than in the same period in 2013. This is why it’s not surprising to see large amounts of money changing hands at the moment, such as Hugh McMahon, ex-owner of Lomond Audi, buying Murray Motor Group’s Rolls Royce and Aston Martin business in Edinburgh. McMahon has a vast amount of experience in the motor trade industry as he started working as a trader at the age of 16, and since then has made millions running luxury car dealerships.
In 2012, McMahon sold the Lomond Audi business to Lookers for fifteen million pounds, and now he has spent three million in order to acquire Murray Motor Group’s business. McMahon said: “There is a strong opportunity to grow sales of both brands which are moving into an exciting stage of their development. The market for used luxury cars is buoyant and we are looking at the potential of extending our stock to include quality assured used vehicles. Our first priority, however, is to consolidate our existing position. We have taken over a good business but I want to make it a great business for customers and employees.”
In order to purchase the company, McMahon was funded by the Barclays’ Scottish Corporate Banking team, with Alan Maudsley, head of corporate development at Barclays Corporate Banking Scotland, saying: “Our team has worked with Hugh in his previous businesses and his wealth of experience in the motor industry coupled with his robust plans for growth meant we had the appetite to support this deal. Car sales have long been a measure of economic confidence and although the luxury end of the market has been affected less than most, it too is starting to see an upturn in sales making the business an attractive investment choice.”
McMahon and Barclay’s new investment may pay off even sooner than they think, especially as Rolls Royce announced this week that there has been a 33% increase in luxury car sales compared to June last year. “This is an excellent half-year result and demonstrates the continued confidence that our customers have in our company and our fine cars,” said Rolls-Royce Motor Cars chief executive Torsten Müller-Ötvös. So far, there have been 1,968 luxury models sold by the company who is owned by the German brand BMW. Some of the most popular Rolls Royce models includes the Phantom which retails at £350,000 and the Wraith which costs £210,000.
With the motor trade markets steadily improving, it is not surprising to see that luxury car brands are starting to sell more units around the world. In fact, a large proportion of new registrations for luxury cars are in China, where the car industry is booming and substantial investments are being made in new models and automotive technology. In fact, there was a forty per cent increase in the amount of Rolls Royces being sold in Asia Pacific so far this year compared to 2013, and a thirty per cent increase in the Middle East. With a large proportion of European, Asian and Middle Eastern economies improving, motor traders will be pleased to see that markets across the world are becoming more profitable and open to further investment opportunities.