Written by: Keith Tully
Published: 30th April 2015
Carcraft, the used car dealership chain based in Rochdale, Greater Manchester, has entered administration with more than 500 people losing their jobs as a result.
Trading as Carcraft but officially made up of the CC Automotive Group and the UK Car Group, the business has succumbed to financial pressures after recording heavy losses totalling millions of pounds for each of the past several years.
Issues hindering the company have included high operating costs, a lack of investment and expensive loan note financing, all of which left Carcraft struggling to survive in the UK’s highly competitive used car market.
Carcraft employees, numbering approximately 500, have been paid up until the end of April 2015 but were all made redundant as administrators were called in and Carcraft dealerships ceased trading.
The finance arm of the group, All In One Finance Ltd, is expected to follow Carcraft into administration in the coming days once relevant clearances are granted by the Financial Conduct Authority.
"With great regret a conclusion was reached that it is no longer viable to keep Carcraft in operation. In order to prevent further losses it has been agreed with management and creditors to cease operations with immediate effect,” a statement from administrator Daniel Smith explained.
"The business model has failed to evolve with the changes in the used vehicle re-marketing sector and regulatory environment,” added Taurn Mistry, another of the administrators appointed to manage Carcraft’s affairs.
Efforts were apparently being made from February of this year to sell Carcraft as a business but endeavours to that end ultimately proved unsuccessful. A skeleton staff has been retained to help administrators realise what value they can from the firm’s assets.
Administrators have made clear that anyone who bought a car from Carcraft and signed up for its Drive Happy Plans warranties should not now expect those policies to be honoured.
There are a total of 10 Carcraft sites around the UK and the company was among the top ten used car sellers in the country, turning over more than £120 million and selling in excess of 12,000 vehicles on an annual basis.