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Limo companies hit by credit crunch
They transport pop stars to concerts, top actors to film premieres and offer a taste of the millionaire lifestyle for ordinary people out on hen parties, birthday celebrations or weddings. But limousine hire companies in the city have been left reeling after a major fall in custom as the credit crunch leaves families counting their pennies.
Many Norwich limo firms have already gone out of business and others are planning to sell their vehicles, which can cost more than £100,000, because demand is not meeting their costs. Of the 11 limo hire firms listed in Norwich in the 2008/09 Yellow Pages directory, six are either no longer trading or are planning to sell their vehicles.
And while new companies may have been created, other firms have seen a steep downturn in bookings. Bosses at coach and taxi firm Dolphin Autos, based at Swanton Road, off Mile Cross Road, bought a 13-seater limousine two years ago, promoted under the name Dolphin Limousines.
But in the last three months demand has slumped dramatically, and the company has had just two enquiries over that time. Because of the drop in custom the vehicle is now being put up for sale.
Bookings manager Geoffrey Martin said: “We have put the limo up for sale because bookings had virtually come to a standstill over the last two or three months. “Before that we had been doing a lot more bookings than now.
“It was going out two or three times a week, now it's not going out at all. There is not a call for it in this particular area. “You are talking about £180 per hour at the higher end, and people just aren't phoning up for it. “You would expect Christmas to be much busier.”
Dolphin managing director Kenny Cooke said it was the luxury goods and services which were among the hardest hit in any economic downturn. He said: “Business has gone extremely quiet. “The first things that go in situations like this are the things people can do without, the luxury items. Mortgages have got to be paid before people pay for rides in limousines.”
And in the past year many other limousine firms have stopped trading. They include Stars in Motion, based in Lodge Lane, Norwich, my-limo.co.uk, based in Meadow Way, Hellesdon, and Infinity Limousine Hire, although the reasons for their closure has not been confirmed.
Coole Runnings Limos, based at Easton, also stopped running in August, but manager Jane Coole, who ran the firm with her husband Paul, said the decision was due to a career change rather than the business struggling.
And those that remain have also been hit by the economic downturn. Mike Young, owner of Horsford-based White Lines Limousines, said: “Has the recession hit our bookings? The answer has got to be yes. If someone is planning a birthday party they will be counting the pennies and may take a minibus rather than a limo.”
And while limousine companies have been selling up or forced out of business across the country, Mr Young said many of those were run by people who saw limos as a way of making easy money - but realised too late that making a living from the luxury vehicles was anything but easy.
He added: “So many people think running a limousine hire company is money for nothing, they buy a car on finance and think a couple of bookings a week is going to pay for the limo and the rest of the money goes in my pocket.
“It doesn't work that way. They don't think about the overheads, the insurance and the advertising. It's not as lucrative as you might think. “The ones that are going to be forced out of business are the people who try to jump on the bandwagon for a quick and easy buck and then realise it's not that simple.”
And while many companies rely on Christmas sales to boost their coffers and see them through to the new year, the festive period is not always a time of high demand for limousines, which tend to be booked more often in the summer months.
Robert Flint, chairman of the Licensed Limousine Association of East Anglia, who also runs Downham Market-based Stateside Limousines, said: “Christmas is never good for us. Everybody thinks it must be brilliant at Christmas, but for every £100 people have to spend there are 10 things to spend it on - office parties, Christmas parties.”
And he said all limo hire firms would have been hit by the credit crunch - but said companies should have seen the downturn coming and planned for it.
He added: “Every limousine company will have felt the downturn and some will be looking to get out of the business. “It is to be expected, limousines are a luxury item. When things are hard people cut out the luxuries. Everyone should have seen this coming.
“We have been told it's going to be hard for the last six months and things at the luxury end are always the first hit. Companies should have planned for it. “Everyone thinks hiring limousines must be a wonderful way to make a fortune, but like everything, if it's done properly it's not.
“You have to have them inspected every 10 weeks. “Everyone who is in the business for the long haul has got to cut costs accordingly, ready for when trade picks up, which I'm sure it will. “It might get rid of part-timers and people who are not doing it properly, but ones who are in it for the long-haul will be stronger for it in the future.”
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