Wealthy buyers snapped up second hand supercars last year after exotic holiday plans were torpedoed by the pandemic, according to the UK’s largest dealer of Ferraris, Lamborghinis and Bentleys.
Prices of some used luxury models fell because of the coronavirus crisis, attracting buyers, said the boss of HR Owen, which also deals in Aston Martin, Bugatti, Rolls-Royce and Maserati brands.
“We saw a significant increase in the sale of used cars in the region of not more than £150,000,†chief executive Ken Choo told the Financial Times. “People said I cannot travel to the Bahamas, so I will buy a used Ferrari or Lambo instead.â€
Demand picked up in the second half of the year, once showrooms had reopened after the shutdown in lockdown, with the months of July to December a “blow out†period amid a flurry of sales, Mr Choo added.
Luxury carmakers that import to the UK also increased sales in the final months of the year as transactions were rushed through before Brexit, which had threatened vehicle tariffs of 10 per cent.
But overall annual revenues at HR Owen fell to £400m from £457m as showroom closures took their toll, with those for new cars dropping a quarter during 2020. Used models experienced a fall of just 2 per cent.
The company, owned by billionaire Vincent Tan’s Berjaya Group, also suffered a fall in pre-tax profits to £3.1m last year from £6.3m in 2019.
Mr Choo expects demand for used supercars to continue as travel restrictions are likely to remain, leaving customers with more disposable income and itching for a discretionary treat.
Like the mass market, the luxury segment of the car industry has also been hit by the pandemic.
With the forced closure of showrooms during the UK lockdowns, a restructuring during the year led to a 20 per cent reduction in staffing at HR Owen, leaving the company smaller but leaner.
“It was painful, but we were trying to save the other 80 per cent of the staff,†Mr Choo said. “We managed to keep our cash flow healthy and were able to keep our profits above water.
“If things turn hunky dory again, I would like to bring them back.â€
Allowing customers to collect cars after ordering online proved a surprise hit.
About 90 per cent of customers even ordered new cars without test driving them during the pandemic, an increasingly common occurrence in mass market retailing but one that only accounted for about half the sales in the luxury segment before the coronavirus crisis.
“Pre-pandemic, everybody drives their cars before they buy,†Mr Choo said.
The company has begun work on a new flagship dealership park in Hatfield, Hertfordshire, with parking for more than 500 cars.
Construction is expected to begin this year and the site will open during 2022, with Bentley and Lamborghini as confirmed brands so far.
