Last year’s lockdown had a “devastating” impact on the owners of a major Dundee car dealership, Eastern Western Motor Group.
The firm, which bought Barnetts Motor Group in 2018, saw sales fall by more than £100 million.
The business was forced to close for large parts of last year with the country in lockdown.
But strong demand when its 33 premises reopened meant it ended the year with a 33% rise in profits.
The holding company accounts show turnover fell from £773.9m in 2019 to £664.7m for the year ending December 31 2020.
Pre-tax profits were £15.8m last year, up from £11.9m in 2019.
Group financial director Nasser Mohammed said the first lockdown was “devastating” with 8,000 fewer vehicles sold from the start of lockdown to the end of June 2020.
Eastern Western also saw parts sales fall by more than £7m for the same period and the group sold 100,000 less labour hours in its aftersales department.
But when able to re-open, pent up demand and good decisions taken by the company saw the group’s performance rebound significantly.
Monitoring the market
The group has two premises on Dundee’s Riverside Drive, as well as BMW, Mini and Nissan dealerships in Perth.
The group also has units in St Andrews and Dunfermline.
Mr Mohammed said the pandemic continued to impact business this year, but that demand for cars has been high.
He said restrictions – particularly on the hospitality industry and on travel – could help the luxury car sector.
“We continue to monitor and adapt to market conditions,” he said.
He added restrictions on foreign holidays and on the hospitality and entertainment industries may help the industry.
Mr Mohammed said it could result in a rise in “alternative feel-good purchases”.
His report adds the pandemic exposed a weakness in the online capabilities of many car retailers.
“During lockdown, the group enjoyed a degree of success from its online selling tools,” he said.
“But it was also clear more development work is needed.
“Most car manufacturers are working on online retailing solutions and although the group has the skills and resources to develop its own online model, it is felt the adoption of manufacturer solutions would provide better brand experiences.”
Brexit and Covid risks for Eastern Western
The group holds a broad range of car and commercial vehicle franchises, including Mercedes, Mazda, Volkswagen, Lexus and Honda.
The group also has a Harley-Davidson motorcycle outlet and a vehicle accident and repair centre.
The average number of staff, including its directors, fell from 1,526 in 2019 to 1,454 over the reporting period.
Mr Mohammed said the group’s principal risks include Brexit and Covid-19 restrictions.
He said the UK’s exit from the EU had “reduced consumer confidence” in the early part of last year.
The company secretary added the semi-conductor shortage and the “significant” economic fallout from the pandemic would be factors going forward.