Western Coast MG pulls Whanganui dealership as sector wrestles downturn

Western Coast MG has no plans to sell its Whanganui building - the former Pizza Hut restaurant on Victoria Ave. Photo / Mike Tweed

Western Coast MG’s expansion into the Whanganui vehicle market has been pulled, with the company citing a slowdown in sales across its regional locations.

The dealership was set to open in the former Pizza Hut building on Victoria Ave.

A pop-up shop had been operating in the car park but that closed in August.

Western Coast MG dealer principal Jimmi Guillosson said tough economic conditions had forced the business to “retrench back to South Taranaki”.

It has dealerships in Hāwera and New Plymouth.

“If well-established guys are struggling, a newcomer to town was definitely going to find it hard,” he said.

“We were starting to get some traction but the extra expenses required, like staffing and overheads, were just a bit too rough.”

Operations manager Craig Baylis told the Chronicle in February the Whanganui dealership would only feature new vehicles, with the pop-up shop operating from March 1 while renovations took place.

“We are still keeping the Pizza Hut look, there will just be cars instead,” he said.

“Who knows - maybe if it doesn’t work out, we can start selling pizzas again.”

Guillosson said there had been a 50% drop in sales across the company’s locations.

“MG is a good product and a good brand but with interest rates and all that good stuff, people aren’t spending.

“It’s not just one business or sector doing it tough at the moment, it‘s across the board - hospitality, real estate, retail.”

Gareth Jones, of David Jones Motors, says new vehicle registrations per month have dropped by more than half compared to 2022. Photo / NZME

Major Auckland car dealership Auckland Vehicles Ltd was placed into liquidation on September 3, with more than $1 million owed to over 120 creditors.

In June, Motor Industry Association (MIA) head Aimee Wiley said there had been five straight months of slumping sales.

“If the current weak demand persists, as projected by industry experts, Government and key economists for the rest of 2024, more closures are, unfortunately, likely,” she said.

“While we all hope for a revival in the light passenger segment, the Government’s forecast of subdued economic conditions in the near term suggests a challenging Q3 and Q4 ahead for the industry.”

David Jones Motors principal dealer Gareth Jones said it was sad to see MG depart Whanganui.

“The retail market is tough at the moment and the Whanganui community needs to keep supporting local so retailers can survive to 2025,” he said.

“Locally, new vehicle registrations per month have dropped by more than half compared to 2022.

“The used vehicle market has also decreased and has shifted to more affordable vehicles in the $10,000 to $20,000 price range, compared to $20,000 to 30,000 two years ago.”

Guillosson did not want to rule out a move back into Whanganui in the future but, at present, Western Coast MG had to look after existing staff and customers.

“Survive to ‘25 is what they say. We just have to work our way through it.

“We still own the building but a bit of engineering and sorting out the power was as far as it got.

“Never say never, though.”

Jones said David Jones’ service and parts departments were still busy as a result of “the Covid sales boom”.

“We are proud to have been able to support Whanganui for the past 40 years and we have had the custom in return in this downturn.

“It’s not easy for most retailers and hopefully the OCR [official cash rate] and interest rate drops will increase consumer confidence and increase spending coming into summer.”

Mike Tweed is a multimedia journalist at the Whanganui Chronicle. Since starting in March 2020, he has dabbled in everything from sport to music. At present his focus is local government, primarily the Whanganui District Council.