Car firm Peoples aims to expand as rivals drive off

PEOPLES chairman Brian Gilda is eyeing expansion of his car dealership group as his rivals look to quit the business rather than endure another recession.

Gilda, who described the market in Scotland as the fiercest in the UK, insisted market downturns presented opportunities "as people ask themselves whether they want to go through another one".

"We would like to expand. We have the quality of management to be able to do it, the financial resources and there are people who are looking to sell. It is just a matter of finding the right opportunities for us."

Although Gilda said figures for the first six months of the current financial year at the Edinburgh-based Ford franchise group were "significantly ahead" of last year he said the market as a whole was nervous about the coming months. This was due to a combination of factors which meant the trade was passing a high point. These included the end of new plate sales in March, closing of the car scrappage scheme and the rise in VAT. Added to concerns about inflation and possible public sector cuts, and many dealerships faced a difficult Spring.

Gilda said he was also looking at introducing a range of non-Ford electric vehicles into his dealerships with Chinese-sourced two and four wheeled vehicles.

While he said it was very difficult to predict how the market for electric vehicles may develop, he said over the next ten years it could grow to "maybe 5-10 per cent of the market".

"Demand will vary greatly across the country but after London I believe Edinburgh is probably the best market for electric vehicles."

Although the scrappage scheme has provided a major boost to the car industry, Gilda said the market for commercial vehicles – regarded as a key indicator of the real economy – was still difficult with no current signs of it coming back in 2010.

Although sales of Ford's 4x4, the Kuga, spiked after the bad weather, Gilda said he expected that to be "transitory".

New cars account for the majority of Peoples' sales at its dealerships in Scotland and the North-west of England, although 60 per cent of profits come from after-sales revenues.

Turnover in the last financial year, to 31 July 2009, fell 10.9 per cent to 132.9 million. Pre-tax profits dipped 5.7 per cent to 1.1m.