By the time 1990 arrived, interest rates in Australia had hit seventeen percent, producing an immediate negative impact on consumption and reducing inflation dramatically.
By the time 1990 arrived, interest rates in Australia had hit seventeen percent, producing an immediate negative impact on consumption and also reducing inflation dramatically. This came after the strong growth, but high inflation and high unemployment of the 1980s period. By the end of 1990 the country had entered into a deep recession which lasted until late in 1991. Economic growth fell and unemployment rose, causing severe hardship and disruption.
The Annual Report of Maughan Thiem Motor Company Pty. Limited dated 30th June 1991 reveals just how difficult times had become. Sales of new Fords for the twelve months to 30th June 1991 numbered 714 compared with 924 for the prior financial year. The impact of high interest rates added to the woes of the business, with total company expenses rising by 9.3 percent in spite of a reduction in new vehicle sales.
It became clear to the directors that, if the company was to remain prosperous, then measures would have to be put in place to spread risk and to increase growth.
In 1958 the company had relinquished all other franchises to become a sole Ford dealer. This had proven to be a highly profitable decision and had paved the way for Maughan Thiem’s fortunes. But Ford’s diminishing sales volume in Australia meant that it was time to seek new growth opportunities once more.
On 1st of August 1991, Maughan Thiem entered into a new franchise agreement with Daihatsu Australia to sell new cars from a recently-acquired site located at 999 Port Road, Cheltenham. This property had been occupied by Containers Limited until it was purchased by Maughan Thiem and converted into a modern new car showroom. It was a perfect location for this activity, as it was immediately adjacent to the 1013 Port Road site and was able to share administrative infrastructure with the rest of the business, thereby keeping costs to a minimum.
TO BE CONTINUED …….