Car dealer in receivership despite boom
Annual car sales are on track to overtake 200,000 for the first time in nearly a decade but one high-profile Wellington car dealership has gone into receivership, owing an estimated $5 million.
King Toyota has two sites in Lower Hutt and one in Upper Hutt. However, owner David Clarke called in receivers this month after a quiet February.
Ten of the 51 staff have been laid off but the business continued to run as normal.
PricewaterhouseCoopers receiver John Fisk said the receivership did seem "counter-intuitive", given recent car sales statistics.
Economic research firm Infometrics recently heralded a "sensational March quarter for car dealers" as 22,099 vehicles were sold across the country in March.
But King Toyota had had "a particularly slow February, for whatever reason", Fisk said, though March had actually been one of its record months.
"That slow-down [in February] was enough to cause some liquidity problems.
"We've only been in there for a short period of time so haven't really had enough time to investigate exactly what has happened, but I think in essence the company had been under-capitalised for some time."
Initial estimates had the company owing $5m, with the first receivers' report due in early June.
Fisk said there was no evidence of anything untoward causing the receivership. Clarke was overseas but had been helpful, Fisk said. It appeared the director had essentially run out of funds and done the appropriate thing in appointing receivers.
Toyota New Zealand was supporting the firm, with all warranties being honoured and vehicles being delivered on deposits, which could in theory have been unsecured claims.
Fisk said the company would continue to trade, though it was too early to speculate on who would likely buy the dealership.
Motor Industry Association chief executive David Crawford said new vehicle registrations were at levels last seen in the early 1980s.
But used vehicles were also racing ahead, with the 10,864 sold during March 35 per cent higher than in the same month last year, according to the association.
Infometrics said sales growth was particularly rapid for imported used cars, which was at its highest level since July 2008.