NextGear Capital Launch – the Impact on the Irish Economy - NextGear Capital Ireland
The economic downturn saw a number of financial services organisations withdraw their support from motor dealers across Ireland. Now, as the market place sees sharp increases in sales volume, dealers can benefit from an all-new source of stock funding finance. NextGear Capital’s simple aim is to help dealers to stock more and sell more, all of which should provide a welcome boost to a sector that has already created an additional 5,600 jobs since 2014.
Through the dark days of the credit crunch the withdrawal of a number of financial services suppliers and tightening of credit facilities from those which remained placed pressure on motor retailers, especially smaller independent dealers. Many were forced to use their own funds, business finance or overdrafts to purchase stock – none of which should be considered ideally suited to purpose. In UK research, over 90% of used vehicle dealers found themselves relying upon such sources.
Following its entry into the UK market, NextGear Capital succeeded in advancing over £250million of funds to support almost 600 motor retailers in its first year of operation. It is a story the business aims to replicate in Ireland. By the end of 2016, the business expects to be providing stock funding to over 25% of the franchised dealer network and have rolled out its support to around 50 independent dealers, refining the support to meet the sector specific needs.
With the Irish used car market still short of used stock, notably in the new -3 years age range, as a result of the slowdown in new car sales up to 2014, many dealers are seeking stock from Northern Ireland and Great Britain. A unique aspect of the NextGear Capital proposition is the dual currency platform that can help dealers get access to its 26 UK auction partners selling over 1 million used vehicles annually. Dealers can source vehicles without paying for the vehicle out of pocket enabling them to offer the vehicle for sale on their forecourts for over 100 days before they must purchase it outright or place it back into the remarketing cycle.
NextGear Capital UK is set to become Ireland’s largest independent stock funding provider to the automotive industry and as NextGear Capital Managing Director David Mercer observes the timing is perfect;
“Car retailing is at the forefront of the growth in the Irish economy. With new car sales up 30% year on year, playing a pivotal role in the country’s recovery that is forecast to make Ireland the fastest-growing economy in Europe for the second consecutive year. Our entry to support motor retailers will provide additional impetus to this upward trend in sales and employment. We are now looking forward to helping more dealers to accelerate their own growth plans.”