Inchcape to ride out Japanese disruption

12th May 2011 18:11

Car dealer Inchcape was stuck in neutral Thursday as it reported on an uneven global recovery in the car industry.The group's first quarter turnover of £1.56bn was down 0.6% on a year earlier, though favourable exchange rate movements flattered the performance; on a constant currency basis, sales were down 2.0%.Like for like sales were down 0.8% in actual terms and down 2.1% in constant currency.The group saw strong revenue growth of 10.9% (constant currency) in Asia-Pacific and Emerging Markets, regions which account for 65% of the group's trading profit. As expected, things were less rosy in the UK and continental Europe, where revenue declined year on year by 9.6%.New car sales were down in value terms from last year but not as much as the board had feared, due to the strong performance of the group's upmarket brands n the UK and heavy demand for new motors in Asia-Pacific and Emerging Markets.Used car margins remained "resilient", while the Aftersales business continued to perform well, the group said. Inchcape now expects the potential savings from its restructuring programme, announced in the final quarter of 2010, to be slightly higher than originally envisaged.The effects of the earthquake in Japan and the resulting temporary supply restriction will, based on the firm's current information, result in some reduction in new car revenues in 2011. The group is taking cost cutting actions accordingly to minimise the impact."Whilst we will be impacted by the effects of the earthquake in Japan on the supply chain, Inchcape is well equipped to handle the temporary supply setback in some of our markets during the next few months. We operate primarily in the premium segment, where buying a car is an important and considered decision and we expect most customers to be prepared to wait for a period to take delivery of their desired vehicle," said André Lacroix, group chief executive officer of Inchcape. ---jh