Millionaire motor distributor Bill Cullen will lose annual revenues of approximately €175 million as a result of Renault's decision to take control of its Irish franchise from his group Glencullen.
Owner of the Irish distribution rights for the Renault marque since 1986, Glencullen will lose the franchise when its five-year contract runs out at the end of next year. The company, which claims annual revenues of some €350 million, will not receive any payment for the termination of this business.
A spokesman for Glencullen Holdings said the development was likely to reduce its annual revenues by half. He said Mr Cullen will continue to sell Renault vehicles through the Citygate chain of motor retailers, which has six outlets in Dublin, Laois, Clare and Galway.
Renault's decision follows a decline in profitability at Glencullen Holdings, which the company has attributed to "strong competition" in the motor market. Operating profits fell to €2.9 million in 2005, the last year for which accounts are available, from €5.71 million in 2004.
At the same time, revenues increased to €254.62 million from €241.97 million. Mr Cullen cites revenues of €350 million on his website, Goldenapples.ie.
"Renault France have confirmed that they will not be renewing our distribution franchise agreement at the end of 2008. To facilitate a smooth transition of Glencullen Distributors Ltd to a subsidiary operation of Renault France they will be assigning two senior managers to join our executive team in September 2007," Glencullen said in a statement.
Renault's decision is in line with previous moves by BMW to take back its Irish distribution rights from businessman Frank Keane and the decision of Volkswagen to take back its Irish franchise from O'Flaherty Holdings, the family-owned company that has held the rights since 1950.
Unlike Renault, both BMW and Volkswagen made payments of tens of millions of euro to buy out their Irish distributors at the termination of their contracts.
Mr Cullen sold fruit on the streets of Dublin as a child, left school at 13 and joined Walden's Ford dealership as a messenger boy. After nine years he became director general of that company and later set up his own Ford dealership, Flairline Motors.
He bought the Renault dealership from Waterford Crystal for £1 (€1.27) and assumed debts of £19 million as part of the takeover. He used his mother's remark at the time of that deal - "it's a long way from penny apples" - as the title of his best-selling memoir.
Renault was selling about 2,500 vehicles per year in the mid-1980s. Glencullen sold more than 9,000 cars and 2,800 light commercial vehicles last year. The 2005 accounts show that Glencullen Holdings investments were valued at €59.83 million. Mr Cullen is the sole shareholder.
