Heartbeat of industry still strong
Peter Morton of Herbert Morton Chartered Accountants specialises in services for the motor trade and says most of his clients are managing well.
“Obviously, we are not in the midst of a roaring economy but many businesses are doing as well now as they were this time last year, some are doing even better.”
He says the election results have given people the certainty they look for in tough times, and the Government’s early action on wage subsidies softened the impact of lockdown on businesses.
The summer holidays are also likely to bring some cash into the badly hit tourist markets with Peter predicting the next six months will continue to be relatively profitable for most MTA members, “Covid-19 permitting”.
In general terms, Peter reports that mechanical workshops are about as busy as they were this time last year. However, he says some are telling him that they are now experiencing problems getting the parts they need. “As Europe goes in and out of lockdowns, supplies are likely to continue to be delayed, so repairers will probably start fixing, rather than replacing, some parts.”
“Service stations are selling slightly less fuel, but many have seen their shop sales increase during lockdown and their workshops are still going strong. Tobacco sales are up – as more people use their local service station to avoid the supermarkets.”
However, he says motor trade businesses in the big tourist areas of Queenstown, Te Anau, Wanaka are still feeling the loss of the international tourists.
Collision repairers in Auckland are recovering from the lockdowns, helped by rent reductions and the wage subsidy. “None of our clients are at the point where they have had to significantly restructure, although I suspect businesses that are carrying heavy debt will be struggling.” Peter says these businesses should be able to negotiate interest-only repayments with their banks.
Dealerships continue to do reasonably well, particularly those in rural areas. However, the pandemic lockdowns are affecting new car production and supplies are dwindling. Customers now need to be prepared to wait for several months for some models.
Peter says, “None of our clients have had to close their doors as a direct result of the pandemic. However, there are one or two who were reaching retirement age who have felt that things were getting just a bit too hard and are either selling or closing up.”