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The Times blasts car dealers over profits since COVID furloughs

Cash flutters upwards

Newspaper The Times has criticised dealer groups which it says will post "record annual profits" this year for not paying back the state support they received when COVID lockdowns closed their showrooms.

The Times' Business section claims its investigation has found motor retailers are set to report best-ever profits from the 2021 financial year thanks to "galloping car price inflation and staff cost-cutting", yet "refuse to return hundreds of millions of pounds in taxpayer handouts which got them through the pandemic".

Marshall Motor Holdings chief executive Daksh Gupta responded on Twitter that his top 10 AM100 group had repaid all 2021 furlough and retail grants, while in 2020 it stopped dividends and management bonuses plus took voluntary pay cuts.

"We stopped 2019 & 2020 dividends, did not take management bonuses despite profit targets being met, took voluntary pay cuts, repaid £10.9m of VAT 18 months early, enhanced furlough for our people, no COVID related redundancies and repaid ALL 2021 furlough and retail grants," stated Gupta, who won the AM Business Leader of the Year Award in 2021 partly in recognition of how he had supported his workforce during the pandemic and his decision to pay back Marshall's furlough grants.

Robert Forrester, chief executive of Vertu Motors, has previously said the financial support was there because the UK Government closed down businesses "by diktat" and it ensured those businesses were not considerably weakened.

During the pandemic Forrester has occasionally voiced his frustration with the impact of Government-imposed restrictions and lack of clarity for businesses.

AM Editor's comment

There is no doubt that the current demand-outweighing-supply dynamic in the new and used car markets is bringing some benefits to dealer groups. These benefits were unpredicted, and unprecedented.

The fact remains that motor retailers operate, normally, in a very low margin market.

That The Times is critical of a potential £1bn aggregated profit from an entire retail industry segment which has an aggregated revenue of more than £80bn may seem a little unfair to motor retail bosses, when in other sectors such as energy a single corporation might notch up £9.5bn profit alone from sales just 1.5 times that entire segment.

Imagine how many dealer groups BP could acquire with that!

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