Withdrawing from fleet sales has been a good move for Nidd Vale Group, as the Harrogate-based motor retailer has seen operating profits increase by 55%.

Accounts just published for the year to December 31, 2004, show operating profits at £1.38m, compared to £888,000 in 2003.

Colin Hainstock, chairman and chief executive, says that following the 2003 management buyout, the strategy to drop fleet business has paid off.

“Fleet business is very marginal and probably loss-making for a lot of dealers. For us, getting out of it was quite a clear-cut decision,” he says.

It meant losing a £9.7m chunk of Nidd Vale’s 2003 £60.7m turnover, but brought reductions in staffing and other costs, and Hainstock knows profit is the priority.

In any case, Nidd Vale’s £55m turnover for 2004 represents a £4m increase like-for-like over its retail-only business in 2003.

The company has spent £500,000 upgrading its showrooms in Harrogate and Wetherby during the past year.

Part of the upgrade included adding Seat alongside the Vauxhall, Saab and Mazda franchises in its huge 100-car Harrogate showroom.

Hainstock adds: “2005 is proving more of a challenging market, as everyone knows.

"Yet the manufacturers we represent have in some way insulated us from the worst of the market downfall, as Saab is up, Vauxhall and Mazda are fairly level and Seat, although down, is new business for us.”

Nidd Vale is putting strong focus on customer retention, and recently appointed its first dedicated customer relationship manager, Anna Russell.

She is charged with managing its database of 25,000 customers, and exploring new ways of communication, such as customer text alerts.

“We’re concentrating on making what we do best even better. You have to be very sharp when the market declines,” Hainstock says.

“It costs 13 times more to find a new customer than to retain an existing one, so it is vital that customer needs are met.”