Ross Edwards, managing director of Staffordshire-based premium brand motorhome dealer, Erwin Hymer Centre Travelworld, says Brexit has knocked everyone’s confidence but the motorhome business is still booming
How has Brexit affected Erwin Hymer Centre Travelworld so far?
A fall in confidence is probably the biggest single factor that we’ve seen, particularly in the last six months leading up to the original leave date. We are in the leisure industry, but we are at one end of it. The leisure industry starts from anything from tents to touring caravans and then up to motorhomes and we specialise in motorhomes and we import exclusively from Germany. Confidence in terms of the consumer over the last six months has been a been a huge factor. The other major factor for us has been the exchange rate and the negative impact that Brexit has had on the exchange rate. That has put the cost up for the consumer for our products.
Are people happy to pay the extra?
There are always fluctuations with currency. It’s Brexit this time, but there have been other factors over the last ten years that have affected it negatively and positively. We deal with quite a high-end product and so it absorbs the changes probably easier than other products. Those competing in a very price sensitive area are probably more affected than we are. And, as it came in over a slow period, it wasn’t so instantly recognisable, but yes obviously when you make anything more expensive it’s harder for the consumer to afford the product.
In our industry in general, however, motorhome sales have continued to grow. Two years ago I think we saw the highest level of new motorhome sales in the UK ever. Then we had another 10% increase last year on top of that, so in terms of the statistics and the analysis it is not slowing down the overall purchases of motorhomes.
What contingency plans had you put in place for the original Brexit day?
The Government was very late in their suggestions to businesses that we should all plan for Brexit and certainly, from an SME perspective, it is very difficult to plan for, especially when you don’t know what it is and what is going to happen.
In the months leading up to the original date, we probably imported twice as much stock than we ordinarily would have done for that period of time, but outside of that, it was very difficult for us really to make any contingency plans. We’ve spent the last ten years investing a lot of money and building relationships with the German brands that we represent because they are in our opinion the best brands in Europe, so we have a very specific niche strategy around the brands and these products and we’ve made a success of that. It wasn’t like we could suddenly stop dealing with Europe and start selling British brands because that went totally against what we’ve been working on for the last ten years.
How receptive have your German suppliers been to helping you through this uncertain period?
There is a lot of media over there about Brexit and they’re a bit bamboozled about the whole situation, just as we are. But we have strong relationships with our suppliers and because they are a very big supplier, they very kindly fixed the currency as a supplier for the product for the entire season. So for over a twelve-month season within the product range, they fixed the currency in sterling for the customer, so the price won’t fluctuate. And they have also fixed the purchase price for the dealer as well. So that’s a big element that we have to protect us. So although unfortunately we have a price increase because of the currency, we have total stability throughout the season in terms of the fluctuations of the currency from there and that has been a big help to us.
Did you look at setting up in the EU as part of your Brexit prep?
Our market is the UK, it wasn’t really a strategy that was going to work for us. We’ve also just invested a huge amount of money in building a new dealership which we literally completed in February. It’s been a five-year project for us, so the idea of looking into having new outlets abroad, it just wasn’t a possibility for us at the time.
How do you view the delay, has it helped you or did you just want Brexit to be decided by now?
I was very much a remainer, but now I just want it done. From our business perspective, we just needed relief of one form or another, whether it was kicking the can down the road or whether it was getting the deal done. Either way, it’s certainly released the cloud over people. With our product, it suffers very much from confidence in the market place. We are seasonal and winters are tough for us anyway, but it was very hard before leaving through March and then when it appeared that it wasn’t going to happen in April it was literally like the taps turned on again. Now that everything has been put back until October I think everyone just wants to get on with their lives.