Palmer’s premium attractions

Car dealers are feeling the consumer pinch. In the first eight months of 2005, registrations of new cars in the UK were six per cent lower than 2004. However, several astute operators are riding out the subdued market with canny strategies.

For instance, registrations at franchises operated by European Motor Holdings showed a marginal increase in activity, proving that the company is outperforming the market and vindicating chief executive Richard Palmer’s policy of concentrating on a small number of premium franchises.

Palmer says a feature of the UK market is the migration from volume cars to the premium sector, a facet that should protect the business from tough markets in the future. His comments accompanied another set of strong interim results to August, with adjusted profits coming in at £8.1 million versus a forecast £7.4 million. In September, EMH enjoyed the best profits in its history.

Lookers, which has a diverse franchise network representing both prestige and volume manufacturers over a wide geography, is another thriving in difficult markets. In a record half to June, profits accelerated by 21 per cent and the company has strengthened its after-sales parts operations via an acquisition. Chief executive Ken Surgenor is paying £9.25 million for Bristol-based APEC, a distributor of braking parts, and says the deal will add £15 million to the top line. Shares in the company have had a great recent run — at the current 420p, Lookers is valued at £149.2 million.