De Vries Group has become the second prominent Honda partner to collapse in the downturn.

Efforts by Honda UK to prop up the £62 million-turnover business through the last few months ahead of a proposed restructure in 2009 proved fruitless, and its five Honda showrooms entered administration last week.

Bernard Bradley, Honda UK’s general manager, cars, admitted the collapse partly echoed that of Amethyst Group, a three-site Honda partner which went bust three months ago. 

Both companies had been struggling even before the national collapse in new car sales, which exacerbated their position.
Bradley told AM that Honda had been working with De Vries for several months, providing “management support and significant financial support as well”.

“Honda UK has done everything possible to avoid this situation and to try to protect the employment of the staff,” he added.

Grant Thornton has allowed all five De Vries dealerships – Northallerton, Scarborough, York, Hull and Stockton-On-Tees – to continue trading to reduce stocks and fulfil service bookings.

At least one is expected to close. Initially, Honda feared only two sites would continue trading but administrators believe more have brighter prospects.

Honda expects new partners to be appointed by early March. It is already helping administrators in negotiations with existing and prospective retail partners.

Bradley said the mood of the Honda network was positive despite the collapses. 

De Vries and Amethyst had underlying issues, he said, and “the vast majority” of Honda dealers did not suffer those same issues.

“We’re working with the entire network to ensure that they are viable through this year and into the next five years,” he said. “We’ve taken significant steps to reduce dealers’ targets to provide more confidence for dealers on the ability to earn bonus.” 

First-quarter targets have been cut by 24% and demonstrator requirements have been reduced. New Jazz is selling well, and the Insight hybrid and new 1.4-litre engine for Civic should appeal to buyers seeking more economy, said Bradley.