Swansway is venturing into contract hire as a means of increasing the number of used cars passing through its dealerships and supermarket Motor Match.
Formerly a leasing broker arm that earned a commission on lease cars, Stable Vehicle Contracts is now a full-fledged contract hire enterprise.
The move represents an additional source of income for Swansway, as well as extending its reach to off-contract used cars for its dealerships and its used car segment, Motor Match.
The company aims to establish a fleet of 6,000 cars, with 2,000 cars returning to the business each year, mostly for resale.
According to Swansway Director Peter Smyth: “We will continue to do some broker business but now we will fund, collect payments and the vehicles back. We will not feel the full benefit for at least three years.”
Last year, Swansway experienced issues sourcing used stock. Volume in its used car business fell from 16,078 in 2021 to 14,717.
In response, Swansway has recruited more car buyers to source additional cars and is currently developing its Sell 2 Swansway platform, which is generating 4,000 cars a year.
Motor Match currently achieves up to 4,000 sales annually but Swansway intends to increase this figure to between 9,000 and 10,000 vehicles.
In results filed at Companies House, the company stated that: “During the year a decision was taken to commence work on developing a contract hire business. Operating under the Stable Vehicle Contracts LLP entity, the initial emphasis will be on the hiring of commercial vehicles and then subsequently moving onto passenger cars. Supply agreements have been finalised with manufacturers and funding lines agreed with a panel of funders. The strategic rational being not just profitability on the contract hire agreement but generating a supply of good three to four year old used vehicles for the franchise and Motor March businesses.”
