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Car dealer Henson Group has high hopes for recovery

MOTOR dealer Henson Group is hoping its sales will begin to recover this year as the supply of used cars grows.

Two years ago the Newcastle-based company which operates a “car supermarket” on Whitley Road, Benton, Newcastle, opened additional outlets at the Metrocentre and Silverlink.

It said it had planned to open further sites on Wearside and Teesside but the dramatic decline in new car sales saw its plans change.

The Metrocentre operation at the site of the former Carshock showroom, and its facility at Vroom, Silverlink, North Tyneside were both closed down and it focused on its core site.

However, with sales of new cars currently up year-on-year, the company has seen the used car market pick up, with sales 24% up on last year over the last few months.

Managing director David Wilson, who founded the firm in 1996, said: “If we could get our hands on the quality of stock we would like we would still have the Metrocentre site open.

“The Vroom site is different, we felt it did not suit us, but as new car sales pick up and better quality used cars become available we will be looking to expand once more.”

The contraction in the car market, which at one point over late 2008 and early 2009 saw new car sales plummet by almost 50% has impacted on Henson sales.

In 2007 it recorded revenues of £34.4m but this had fallen to £13m last year. It sees sales coming in anywhere between £15m and £20m in 2010.
While Mr Wilson thinks there are many positive factors in favour of people wanting to buy a car, there are still uncertainties surrounding the ending of the scrappage scheme and the overall state of the economy.

“There are signs that people are changing cars and once companies and fleet users decide the time has come to upgrade their stock then that provides opportunities for companies like ourselves to get our hands on the quality models that we like.”

Henson says more than 40% of this year’s sales have been repeat business and recommendations and it has recently spent £300,000 upgrading its Benton showroom.

The company sold 1,528 cars in 2009. It has cut staff numbers to 24 but believes it will recruit this year.

Mr Wilson said: “Now is a good time to buy. Interest rates are low and there’s no money to be made from saving.”