Rio Prestige

More car clubs face insolvency

Recently we have seen several car clubs face bankruptcy for a multitude of reasons primarily the economic downturn.  The recently established Seagrave club along with many others simply fell by the wayside, those individuals who had started these businesses had not perhaps realised the unforeseen costs involved which may have been a contributory factor to their failure.  All of these clubs were well known to RIO, even the long established P1 has fell victim to this markets current position. P1 as most know has subsequently slid in to possible bankruptcy.

Our club took stern measures during 2008 which included the dramatic downsizing our off site promotional activities. As motor enthusiasts know each year RIO attends almost all large motor shows as exhibitors, however these venues are costly and are attended on the basis of the assessed possible returns from such promotions. The Risk reward ratios have significantly increased and as such RIO Prestige will not attend the Goodwood festival of speed nor Goodwood revival this year these shows were marginally profitable, we have also cut Top Gear Live Birmingham from our calendar and as such we have reduced capital expenditure on events by 75% and shaved over £100,000 from annual operating costs. We took the decision in October 2008 following a valuation on business generated as a result of printed media advertising the results of this study has led to a cut in printed advertising in magazines such as Top Gear by two thirds during 2009 and in doing so reduced marketing spend by a further £35,000. 

The club have decided to focus on mega venues such as Top Gear Live London and Salon Prive both of which have always produced exceptional results this tactic has reduced risk reward ratios that in today’s market are currently unpalatable. To date the actions taken have been proven to be prudent.