Ongoing chassis supply issues with microprocessor shortages dominating the new vehicle industry saw Grimsby motorhome giant Auto-Trail miss out on a potential sales bonanza.
And the outbreak of war in Ukraine then weakened consumer demand as prices inflated, latest results for the Europarc operator have revealed. The circumstances led to sales dipping 16 per cent from to £55.6 in the year to September 2022, having initially anticipated a strong post-Covid surge.
Profits fell further, down 25 per cent, from £7.5 million to £5.6 million, as the management team brought in a range of measures to maintain the workforce through the temporary turmoil. It included the launch of a restoration service, taking the business back to its roots.
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In his strategic report accompanying the recently published results, managing director Shane Devoy said: “The year started with favourable trading conditions. The disruption caused by Covid-19 appeared to be behind us and there were signs of an improving economic outlook. Additionally, conditions appeared to exist for supply disruptions to ease. Those factors together with an unprecedented order backlog, induced us to set an ambitious growth plan for the financial year.
“In the first half of the year, demand for motorhomes remained strong. At the annual Caravan, Camping and Motorhome Show at the Birmingham NEC in February 2022, the first national trade show since the pandemic, we were satisfied to experience one of our most successful trade show results. This result was both surprising and encouraging , as dealers had very few motorhomes to retail. Demand was outstripping our ability to supply, particularly for smaller van-based products.”
New customers entering the market was a key driver. “However, this strong retail market environment was severely hampered by the chassis manufacturer's ability to supply, due to a worldwide shortage of microprocessors,” Mr Devoy said. “Whilst we had anticipated that chassis supply would be restricted in the first quarter, we had expected supply-restriction to ease. Unfortunately, that did not materialise. As a result, and despite having a large order backlog, our production volumes for the financial year were significantly down on forecast.”
Manufacturing lines were shut for several weeks in various periods, with agreements made with staff to amend holidays, hours and methods of pay to retain staff and protect incomes.
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“The alternative to such action would have been to reduce our workforce to adjust to lower production volumes,” Mr Devoy said. “The directors were committed to avoiding such action unless it became absolutely clear that chassis supply restrictions will not ease in the near future. As a result, the company suffered productivity related costs in keeping all staff employed through reduced periods of activity.”
While demand dropped off in the fourth quarter as the impact of not having display models in dealerships and rising prices impacted, chassis supply started to improve following the year end.
“With recent upturns in chassis supply, the directors expect the forthcoming year to be less disruptive,” Mr Devoy said. “ With a strong order book particularly in the growing van market segment, we are optimistic that the business can increase output and improve its performance.”
Staff numbers were up from 200 to 213 for the period.
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