Dealerships suffer in wake of VW emissions scandal

THE emissions scandal that caused an overnight slowdown in the global sales of Volkswagen cars hit the performance of dealership group Johnsons Cars, which has six dealerships across Merseyside.

In September 2015, the car manufacturer admitted it had cheated in emissions tests which led to a global crisis that resulted in the resignation of its chief executive and falling sales.

Midlans-based Johnsons Cars saw a “significant deterioration” at its five Volkswagen and standalone SEAT and Skoda businesses in the final quarter of 2015.

It also required a revaluation of its used vehicle stock, to reflect its changed values. The accounts show an impairment loss of £340,000 for slow-moving and obsolete stock, compared with a £66,000 writedown in 2014.

However the group said its Volkswagen group of franchises “have improved substantially and are trading ahead of budget” when the 2015 accounts were signed off, on April 25.

Despite the Volkswagen problems, sales rose 6.1% to £287.7m across its 35 dealerships although pre-tax profits were down 43.3% to £676,000.

The company said: “The New Year has started as expected with great expectations of a buoyant market and new vehicle targets to match.

“With a recovering and strengthening performance from the Volkswagen group of franchises the signs are that the company will produce a satisfactory result in 2016.”