The head of BMW UK reportedly has attacked London’s congestion charge, claiming that it costs the unit’s flagship Park Lane dealership £300,000 ($US535,000) a year and requires a full-time member of staff just to fill in the forms.
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The Daily Telegraph said Jim O’Donnell, managing director of the German car company’s British subsidiary, warned that the costs of doing business would strip London of all smaller retailers by the 2012 Olympics.
He reportedly warned: “With the costs of doing business in London constantly rising, I think that by the time the Olympics come, the independent retailer in London will cease to exist. There are clear signs this is happening already in car, food and petrol retailing.
“Operational profitability is a key driver for all businesses and the Mayor of London should not underestimate its importance in the run-up to the Olympics.”
The Daily Telegraph noted that BMW’s dealership at 177 Park Lane, which sells £90 million worth of cars a year and accounts for 3% of the German auto giant’s British sales, is situated on the western boundary of the zone. This means that each time BMW delivers a car to the showroom by using side streets, involving a trip of just 25 yards into the zone, it has to pay a congestion charge.
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By GlobalDataO’Donnell told the paper: “This year we shall spend just over £200,000 on the congestion charge and next year’s budget shows this rising to £300,000, reflecting the 60% hike in charges imposed this August.
“The congestion charge occupies one person full time and is a real drag on business in the area.”
Speaking at BMW’s annual press dinner in London on Wednesday, O’Donnell reportedly said the car maker was being priced out of doing business in London.
According to the paper, he added: “As if the congestion charge was not bad enough, we are all familiar with that other problem of doing business in London – parking. Next year’s budget at Park Lane shows that we need £700,000 to accommodate our parking requirements.
“So before we open our doors we have a £1 million bill for congestion charges and parking.”
According to the report, O’Donnell said two dealers had closed this year “as they could not see how they would turn around their business and added: “There is a real danger that the cost of operating in London will become prohibitive.”
There are plans to extend the congestion charge westward and residents and businesses in Kensington and Chelsea are opposing this move.
A parking garage in Kensington was last week charging £31 ($US55) for a 24-hour stay. Those hotels with parking garages typically charge at least £20 for the same period.
