A Tyneside commercial vehicle group that expanded into car sales two years ago has lost the bulk of £250,000 invested in Mitsubishi and Suzuki dealerships.
Bell Truck Holdings’ offshoot Bell Car Sales went into voluntary liquidation owing £1.2 million.
Yvonne Bell, joint owner of Bell Truck Holdings with her sister Carolyn Bayne, said: “We felt the market slow down a year ago when pump prices rose and affected 4x4 sales. Our small cars sold but were less profitable.
“Mitsubishi helped by cutting costs, but it was too late.
“Suzuki was also supportive. But in the end we couldn’t see a future or how to restore cash flow, and had to close the car business so that we did not jeopardize the truck side of the business.”
Bell said 33 people working for the car division had lost their jobs and there were 20 redundancies in the truck business in December.
“People think there are big margins in £80,000 trucks, but there aren’t,” said Bell. “Dealers rely on revenue from aftersales.”
The group, founded by the sisters’ father, operated a Mercedes-Benz car dealership at Coldstream near the Scottish border in the 1980s.
“We were forced to lose the franchise when Mercedes decided it wanted big dealer groups,” said Bell.
She thought the group was unlikely to seek a car franchise again.
Simon Lundy, of liquidator Begbies Traynor, said Bell Car Sales was a separate limited company and so the group was not responsible for its debts.
“The venture into car sales seemed a logical business move for the group, which blames the decline in the economy for the liquidation,” he said.
Bell Car Sales operated a Mitsubishi dealership on the outskirts of Newcastle upon Tyne, and a Mitsubishi/Suzuki outlet in Sunderland. Both premises were rented and the main asset is a freehold aftersales and repair centre in Newcastle.
Lundy expects the liquidation procedure to take between 12 and 18 months.
“Because of the recession we are likely to have some difficulties gaining money owed to Bell Car Sales.”
Dale Wyatt, an executive in Suzuki GB’s dealer development department, said: “Bell Truck Holdings was both professional and honourable regarding the closure of its Suzuki franchise. We had no concerns about the viability of the dealership.”
Sales, service and parts customers have been advised to use Hodgson Suzuki in Wallsend, or Springfield Suzuki in Gateshead.
Wyatt said: “There are no plans to replace Bell Car Sales at this time although area open point studies are regularly undertaken.”
A Mitsubishi Motors spokesman said Hodgson took over the Newcastle area franchise before the liquidation of Bell Car Sales which operated as a service dealer for an agreed period.