Navan car dealer blames liquidation on VRT change

A Meath motor dealership which has gone into voluntary liquidation has placed the blame firmly with the Minister for the Environment John Gormley and the changes introduced to VRT on cars. 'My business was fine and what he did crucified us and will continue to crucify the motor trade,' said an angry and frustrated Brendan Brady, whose dealership BBC in Navan, has gone into voluntary liquidation. 'Last year, I restructured and put an injection of cash into the business and, two weeks later, he announced the changes to VRT. If I had known what he was going to do I would not have done what I did.' It"s believed the personal loan Mr Brady took out for this restructuring has left him with a debt of several hundred thousand euro. Speaking after a meeting in Navan for creditors to the company Numridge Trading Ltd, trading as BBC Mazda, last week, Mr Brady said the decision was made to close rather than get further into debt with the banks. 'At the end of July, we looked at the cashflow needed until the end of the year. It wasn"t there,' he said. He and his family thus took the hard decision to go into liquidation. There were nine people employed in the business which had the Mazda dealership in Navan and was very popular with car-buyers. It is understood that the main unsecured creditors are banks. According to Mr Brady, when Minister John Gormley announced last year there would be changes to the VRT on cars, motor dealers had already placed orders for their 2008 stock. 'There was no feasibility study done, no impact study done by the minister on what the changes would mean. It was done without research and he said it would come in the following July.' The VRT changes meant motorists wanted diesel, not petrol cars, and meant the second-hand stock of cars would not sell. 'At the end of January, it was like somebody turned off a switch. It was similar to the 'No" vote to Lisbon in that people were not given any explanation of what was taking place. Even the second-hand car-buyers were waiting because the public was so unsure,' said Mr Brady. He said he was trying to find out what price new models like the Mazda 6 would retail at and says neither Mazda nor the Revenue Commission could tell him. 'Companies couldn"t give us their new price list until the end of May because they couldn"t get the information off Revenue and Revenue was saying it"s not an exact science. It left me with what had been a good business and a large stock of stocked cars.' He said he had to pay what are called 'stocking charges" to the banks that were financing these cars. 'We paid tens of thousands of euro in stocking charges over six months for cars that were just sitting there, but we waited for July in the hope of a boost.' By July, the disquiet in the overall economy meant 'people were waiting until 2009 to buy. The end of July came and we looked at the cashflow needed until the end of the year. It wasn"t there.' Brendan Brady predicted he will most definitely not be the last motor dealer to find themselves in this predicament. 'There is a very a large amount of dealers crying out for help and don"t know where to find it. There are dealers paying €80,000 to €100,000 in stocking charges and that, coupled with the fact that stock is not selling…' he remarked. Minister for Transport Noel Dempsey said last week in response to Mr Brady"s criticisms that motor dealers were given several months" notice of the impending changes in the VRT arrangements. Mr Brady replied by saying that the motor trade was actually aware that changes to the VRT were coming down the tracks for some years. However, there were not made aware of its structure or how it was going to be rolled out until Mr Gormley made his announcement, at which time it was too late to adjust orders. Mr Brady felt the changes should have been eased in over a three-year period so as to have lessened the impact on dealer businesses.