Steering a steady course helps salesman stay in driving seat

Michael Barrable has been in the motor industry all his working life. He cut his teeth in car hire before joining Waldens, then one of Dublin's landmark city dealerships, as a junior salesman in 1978.

Barrable has been operating his own dealership since 1987 and is one of Ireland's longest serving Fiat dealers. He moved into a purpose built showroom on a two-acre site in Airside motor park in Swords, Co Dublin in 2005 and is a Kia, Seat and Fiat dealer.

With more than 35 years’ experience, Barrable has seen the motor industry go through its share of challenges. He says the current recession has been the toughest. In 2009, new car sales collapsed and in the years that followed some of the biggest names in motor retailing went out of business.

Before the crash Michael Barrable Motors employed 37 people and the dealership was selling about 1,200 new cars a year. In 2008, this fell to 150 units and turnover dropped by nearly 70 per cent.

“We had to let very good people go and it was a very difficult and hurtful experience for everyone involved,” Barrable says. “Those who stayed recognised there had to be big changes, including significant wage cuts.

Cut overheads

“I have had a really good finance guy at my side since I started in business and we moved quickly to cut our overheads and put the necessary effort into maintaining a good relationship with our bank by keeping them in the loop.”

The demand for prime real estate during the boom saw a number of motor dealers become heavily involved in property speculation. “I dabbled but in a very small and affordable way and basically stuck to the knitting,” Barrable says.

“When things came unstuck, I didn’t have any huge debts to service or expensive lifestyle to support, and could minimise what I needed to take out of the business. I had bought the Airside site in 2001 before prices went crazy.

“From what I could see, guys were using the cash flow from their dealerships to support other interests,” he says.

“That’s not sustainable when sales fall off a cliff. There is a lift in the market now and our sales are up about 20 per cent. Our after-market sales are also recovering. We will do about 475 units this year and see our staff numbers growing. We currently employ 22 people.”

Michael Barrable Motors is a family business. Barrable’s wife Linda has always worked alongside him and their sons Peter and Robert (who is making a name for himself in international motorsport) are also involved.

“There was a temptation during the boom times to open a second or a third outlet. But I’m not convinced that this is the right approach for the Irish market,” Barrable says.

“Buying a car here is still something very personal. Most people want a relationship with their dealer. When they call in, they want to see you. That’s not possible if you have multiple outlets.”

In the heyday of Fiat sales, Michael Barrable Motors was selling about 1,000 Fiats and 200 Alfa Romeos a year. Barrable still sells Fiat but when the brand began to falter he spread his wings, taking on Kia in 2005 and Seat 2012.

Fiat falters

“There was no warning that Fiat was going to go into such a decline and I still don’t know why it was allowed to happen,” he says. “We eventually dropped

Alfa Romeo

because it was actually costing us money to represent them. On top of this, there was no investment in the brand.

“With Fiat, we basically had two models, Punto and Panda, and we needed a broader range. I liked the positive noises coming from Kia and their sales were growing strongly on the back of models such as the Sportage. With Fiat, we had to ‘sell’ very hard. With Kia people wanted to buy.”

Barrable says one of the reasons he took on the Seat franchise was the availability of finance through its parent company’s (VW group) own bank. “We had the spare capacity within the dealership and, with the market practically devoid of car finance providers, we saw it as an opportunity and it has worked very well for us,” he says.

Barrable is sanguine about one of the most divisive issues in the Irish motor industry – the practice of pre-registering vehicles. This puts brand new cars on the market at a price that reflects the fact that anyone buying them is the second owner. “I really don’t have a problem with it and it suits some buyers very well,” Barrable says. “I’ve been used to a pre-registering culture with Fiat and Seat also does it. Kia does not.

“However, there is a cost to pre-registering, so you need a balance between pre-reg and normal sales. In my view, the practice has been overdone here. I think the ideal balance is around 80 per cent retail and 20 per cent pre-reg.”