The UK-based car dealership Pendragon, historically associated with luxury and specialist car marques, has opened the first domestic Corvette and Cadillac showroom. Although Cadillac has previously been distributed in the UK (by GM’s Vauxhall), it is the first time that the Corvette will be sold through an officially-appointed dealership in the country.
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Pendragon has gone from strength to strength in recent years with total operating profit almost doubling from £25.5 million to £48.3 million in the 1999-03 period. The company has displayed shrewd management in reducing its number of trading locations and thus its overheads. At the same time, it has continually looked to invest in its network and broaden its horizons. This year, the acquisition of CD Bramall not only provided welcome economies of scale, but also took a major competitor out of the equation.
A presence in the volume markets sector meanwhile, with brands such as Ford and Vauxhall, gives Pendragon a counter-balance to its exposure in the luxury market. Sales of such brands will be less sensitive to any macro-economic downturn due to their greater mass-market accessibility.
Despite limited exposure to the UK market, Corvette and Cadillac have maintained their reputation among UK consumers as classic brands. Pendragon’s exclusive retail rights will ensure minimal competition other than from the second hand and private import markets. A well-placed marketing campaign could therefore drive ample sales volume.
Pendragon’s continued investment and consolidation strategy has served it well so far and looks likely to continue doing so. Company executives will be aware of the threat to sales in the highly volatile and competitive UK market should the economy start to falter, but provided overheads are kept to a minimum and a wide product range is maintained, there should be little but success in the future.
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By GlobalDataSOURCE: DATAMONITOR COMMENTWIRE (c) 2004 Datamonitor. All rights reserved. Republication or redistribution, including by framing or similar means, is expressly prohibited without prior written consent. Datamonitor shall not be liable for errors or delays in the content, or for any actions taken in reliance thereon.
