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London Volvo expects its profits to rise

Volvo Cars London, formed in a management buy-out from HR Owen, expects to be more profitable now the dealerships are relieved of costs related to being part of a quoted company.

Managing director Tracey Perry, previously HR Owen’s divisional director for Volvo, said: “We usually broke even but now do not have to contribute to head office and compliance costs. This will make a difference.”

Perry forecasts £40m turnover this year for the new business, and “slightly more” in 2010: “We are in a better position than dealers with some franchises because Volvo buyers in London tend to be less affected by economic downturns.”

She and former HR Owen aftersales director Frank Fisher led the MBO, paying £186,000 cash and with no payment for goodwill.

Barclays Bank provided the main funding with Ford Financial looking after the stock requirements.

Last June, HR Owen’s Volvo division had gross assets of £9.3 million and lost £19,000 in the first half of the year. 

Nick Lancaster, HR Owen chief executive, had been seeking to sell his Volvo outlets for some time as part of the group’s downsizing and focus on luxury brands.

Lancaster said: “Tracey Perry has formed her group at a good time. Once the economy improves I think Volvo will do well in London.”

Perry said a £1m refurbishment at the Colindale, north London, site would be completed this summer. All three retail points would then meet Volvo’s corporate identity. 

The central London site at Marylebone already does, and Volvo Cars London will run Volvo’s flagship site at Chiswick, opened last year.

Volvo Cars London also takes from HR Owen a rented aftersales point at Regent’s Park. Perry said the owner now had residential planning permission, and the operation would be moved.

A spokeswoman for Volvo Car UK said: “Tracey Perry suggested the company name Volvo Cars London, and after a review it was accepted. There are no plans to adopt similar retail names elsewhere.”

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