EP Mooney may have shut but Paraic Mooney is gearing up for a return to the busines he loves, he tells PADDY COMYN
ONE OF the biggest casualties of the downturn in the economy has been the motor industry, for several reasons: banks and lenders seem unable to supply finance products and the collapse of the building trade has all but ceased sales of commercial vehicles.
The changes to the VRT and road tax system, according to motor dealers, created uncertainty in the market and damaged residual values as well as effectively killing the SUV segment. So it’s not surprising that there have been some major closures in the industry.
The Hogan Group, Belgard Motors and, more recently, EP Mooney have been among the most significant of these. Although widely regarded as one of the better run dealerships in Dublin, EP Mooney went into liquidation last month, with reported debts of €22 million. The company’s gross revenue fell from €63 million in 2007 to €60 million in 2008 and, by the end of October, to €42 million. It had losses in 2007 of €828,000, €8.7 million in 2008 and, in the first 10 months of this year, they stood at €3.6 million. The company has more than 700 cars in stock at five premises
We sit in the offices of Paraic Mooney on the now empty corner site on what was Ireland’s busy and healthy motoring hub: Dublin’s Long Mile Road. But the area is starting to take on a very different pallor. Through one window we can see the empty multi-million euro showroom of White Bishop cars, with the Opel signs still up, an expensive relic of a quickly aborted expansion. Through another window, the former premises of Nissan Ireland, now part roller disco, part car auction.
Underneath, the empty showroom has quickly gathered dust without the attention of staff and cleaners. Brochures and cardboard cut-outs of new models are the only sign that this, just a few short weeks ago, was a seemingly thriving dealership.
But the reality was different and a multitude of factors conspired to put the business under what would turn out to be, terminal pressure.
“The VRT changes and the timing weren’t great. The anomalies caused by the change to road tax meant that some cars quickly became sale proof. Manufacturers also had an over-supply problem and as a result new car prices and used car prices dropped. That was the reality. As people were being offered less for their used cars, they decided not to trade in.
“Manufacturers hadn’t read the signs properly. Every one of them overestimated the market so we were all stocked to the gills with new cars.”
Mooney doesn’t think that there is one single reason for the problem and he won’t point the finger at any one group of people. “When Lehmans collapsed, then Anglo collapsed, then the building trade collapsed, everything fell apart and nobody could have predicted what happened. It was a tsunami. It went around in one big domino.
“I was up to date with all my capital payments until October. I had a tax clearance certificate issued in the middle of October but we just couldn’t get any more funding. It was a choice of pay the staff or pay the tax and I said pay the staff and we will close up.”
Mooney invested in the property market, but not only when times were good and, rather than being a noose around his neck, he says that it has been his property business which has been attempting to keep the car business alive after the finance from lenders dried up.
“There is no more support. I have put €15 million from a business that I own into the motor dealership to fund working capitals and rents. We have a company that owns all the property and a company that owns the motor dealerships. The property side of the business is not in liquidation. So we will pick ourselves up and get some of our businesses re-established and get as many of our properties rented out as quickly as possible.”
Does Mooney think that the finance companies could have done more to help? “Lombard was the most helpful this year, some others shut up shop early but you can understand why. I don’t blame the banks and I am not fighting with anyone. It was an apocalypse. But it could get worse.”
Mooney directs me to write down some figures. “There are two million cars on the road in Ireland. In 2007 there were 650,000 cars that were less than three years old on the road. In 2008, there were 620,000 cars of less than three years old on the road. Fast forward to 2011 and the same figure of cars of less than three years old is likely to be about 220,000, as a car park for franchise dealers to maintain.
“Typically, the cars that are dealt with in service departments of franchise dealers are less than three years old. This is going to be a further problem in the future.”
Mooney claims his property portfolio remains healthy. “Three years ago, our investment property was worth €120-€130 million. More recently, the property side of the business started to unwind because all the values disappeared and we had concerns and we had to make some decisions. It was like a four-legged stool, you can stand on three, but not on two. We could be in trouble with the banks or not be in trouble with the banks. And the banks weren’t in the position to do anything else for us.”
Yesterday Mooney confirmed he will return to the motor business with a number of investors. Using his premises on the Long Mile Road he will take on a Hyundai franchise from next Monday. But where does he see a return overall? “I think people will get out of the business, but margins will come back in. The situation of chasing volume has to change. We went from 250 people to 95, but to deliver a level of service now I might need 10-20 people.”
Has Mooney escaped any personal loss from his motor business going into liquidation? “There is now a diminished value to my property business as a result. It is quite clear from the creditors. Our biggest creditor has been EP Mooney Ltd. It has been tough on my family, my wife, my parents.
“I came here in December 1973, it was a licensed premises and out of that we have built a business that was turning over €100 million, so that is 36 years of work that has gone down the tubes. I am not the only one who feels like that, there are many others whose businesses have gone down the tubes. If I had planned to fail I wouldn’t have paid so much tax this year. I paid €1.2 million in 60 days to catch up with my tax position. I wouldn’t have done that if I had planned to fail.”
Mooney says he will be back trading again. “We will, we don’t know anything else and this is the best motor trade site in the country.”
