Recent announcements from Toyota, Honda and Rover to increase their workforces substantially, and a clear cultural shift in favour of ‘Made in Britain’ as a strong selling point for vehicles such as the new Range Rover Evoque, are having a positive impact on the UK automotive sector.
January figures recently revealed that the positive trend of 2011 has continued into 2012 with 127,382 cars rolling off the production lines, 15.6 percent ahead of January last year. The majority of the cars produced in the UK – 83.4 percent – were exported. The economic uncertainty aside, the UK automotive sector has excellent prospects and some believe that production in the UK could grow faster than Germany and France.
But whereas this is good news for mainstream manufacturing – and many in the supply chain – not every part of the industry is doing so well, and the strain is particularly apparent within automotive services and distribution. The experience of Quantum Automotive Limited – a vehicle logistics business with a site on the Ashmore Trading Estate in Runcorn and headquarters in Almondsbury, Bristol – serves as a stark reminder of how even a small hiccough in cashflow can have drastic consequences for a business in these difficult times.
The company had a turnover of around £2 million, providing services including distribution, import centre management, compound management and vehicle centre management. It struggled however to maintain solvency in such a volatile marketplace, and, in spite of contracts with high profile customers such as Perodua and Ssangyong, encountered difficulties following the loss of a major contract with Toyota. Though the problem was attributed to issues with a third party, it was Quantum Automotive’s cashflow that suffered and the company ended up with debts of more than £2 million, exceeding its annual turnover.
Fortunately, help was at hand as SFP’s Daniel and Simon Plant – both members of the Insolvency Practitioners’ Association – were appointed Joint Administrators at the end of January and saw the potential for the company to be saved as a viable business. Simon says that in spite of the fierce competition in the automotive sector at present, Quantum Automotive is now in a position to be put firmly back on the road: “Quantum is an established brand that unfortunately hit a bump in the road and was unable to overcome it,” he says.
“However, with a new management team in place, the company will be better prepared this time to survive unsteady market conditions and should soon begin to prosper once again.”