Losses force Swire to quit car dealership
Conglomerate Swire Pacific is to withdraw from Hong Kong's battered car market by terminating its loss-making distribution of the Volvo and Hyundai marques.
The company said its distributorship of Volvo cars would be transferred to Singapore-listed dealer Wearnes International today and of Hyundai cars to an as-yet-unnamed distributor on January 1 next year.
Swire's withdrawal is a result of continuous losses at its car trading arms - Taikoo Motors and Taikoo Asian Motors - on the back of diminished demand for luxury cars and punishing price wars.
It follows the company's retreat from the mainland car market last year, when it terminated Volvo and Kia dealerships.
Hong Kong's car market, which has been the victim of protracted deflation and high unemployment, was dealt another blow earlier this year when the government raised car taxes.
Commenting on the closure of the Hong Kong business, Swire spokeswoman Maisie Shun Wah said: 'It is a natural extension from the mainland retreat last year.'
About 110 employees from Swire's Volvo distribution operations would be made redundant but most of them would be offered jobs at Wearnes, she said.
Its Volvo stock, showroom and repair centre would be also transferred to Wearnes.
Ms Shun said Swire would focus on Volkswagen, Audi and Kia cars and Volvo trucks and buses in Taiwan, where the company was the largest car importer and generated strong sales growth.
Swire had sold 150 Volvo cars this year, Ms Shun said, adding that about 450 were sold for the whole of last year.