Stronger supply and weaker demand are likely to drive greater value in the new car market next year with stronger consumer offers, says Michael Dwan, chief executive of the Gowan Group.
With much of the supply chain issues that dogged the industry for the last two years abating, car companies will look to stimulate demand, compensating buyers who face higher interest rates on repayments. About 90 per cent of new cars sold in Ireland are purchased with some form of finance.
One of the country’s biggest car distributors, Gowan Group, which also owns Senator Windows and domestic appliance distributor Gowan Home, posted sales of €493.6 million last year, up 22 per cent on 2021. Group operating profit at €14.2 million was up 42 per cent in the year.
Dwan says the group was very pleased with the growth given the car market was flat in the year, and the light commercial van market (LCV) was down 18 per cent, largely due to supply issues.
This year car sales are expected to rise 16.5 per cent to a forecast of 123,000 units, while the LCV segment is poised to grow 31 per cent to a projected 31,000 units. The petrol engine share of the car market is expected to stay steady this year at 31 per cent, with electric vehicle (EV) gains being made at the expense of diesel models.
Advertisement
With Gowan distributing eight brands in the Irish market, the group exited the retail end of the car trade this year, selling its sprawling Navan Road dealership to Bright Motor Group during the summer.
Dwan says the sale was a “natural step” and its focus is firmly on growing the share of the nine brands it represents in the Irish market: the eight members of the Stellantis Group (Peugeot, Citroën, Fiat, Opel, Alfa Romeo, DS Automobile, Fiat and Fiat Professional) and Honda.
Total share across the nine brands was just 12 per cent last year, though it is expected to rise in the current year on the back of improved supply and new model launches across the various brands, including Honda which will launch three new models in the Irish market. In terms of total units shifted, the market next year is expected to be broadly in line with 2023.
The group ended 2022 with €28 million in net cash, having repaid warehoused tax debt of €34 million. Its cash reserves are likely to swell further following the sale of the retail business and a number of surplus properties which are expected to be divested in the coming months.
Sales at Gowan Home, which owns the NordMende consumer electronics brand and holds the agency for fast-growing Ninja and Shark appliances, grew 17 per cent in 2020 and Dwan expects them to grow further in 2023. Gowan Home, formerly known as KAL, last year picked up the major domestic appliance (MDA) agency for Chinese group TCL, one of the fastest-growing consumer electronics groups in the world and the commercial partner of Arsenal football club. Manchester City player Phil Foden is a brand ambassador.
Advertisement
Senator enjoyed its best year in over a decade, says Dwan, with sales up 32 per cent. Having invested heavily in the business in recent years, Dwan says the window and door supplier is well poised to take advantage of demand from new house building and repair, maintenance and improvement (RMI).
Dwan said that labour was a challenge in both the auto and window businesses with the company investing heavily in the training of skilled staff.
