Talk Morgan Forums Morgan Sports Cars Morgan Plus Four, Supersport & Plus Six (CX & CXV Generation Vehicles) Safety Recall - Brakes

Better solution than spending £2.50 on what is nowadays a rather indifferent newspaper IMHO, only to find that the 3 lines on p23 accompanying an (impressively large) pic of the Super 3 read thus:

The 112-year-old Morgan Motor Company specialises in hand-made cars with wooden and aluminium bodies, such as the Super 3. It said sales jumped by a third for the 2021 financial year, to £42.6m, pushing it back into the black after a pick-up in production after lockdown. A recall this year of Plus Four and Plus Six models will cost it £1.2m.

Someone who is cleverer than me will run the numbers and figure-out what that equates to as the number of new & used car sales / servicing & spares / restaurant / experiences / memorabilia.

Apparently 1274 CX models required the modification. £1.2 m works out at about £942 per car with some cars requiring return to Malvern. I speculate that the required kits would cost at least £1000 plus transport costs (£100) plus labour costs (exclusive of distribution costs - 5 hours). Consequently £942 seems remarkably low unless the kits were supplied as replacements free of charge by the original suppliers under an agreement to compromise claims.

Presumably also any such a compromise on sensible terms provides some compensation to MMC for loss of profits (no sales for 3 months), the estimated cost of the extended warranty and general disruption of production in addition to an indemnity against claims by purchasers for loss of use and inconvenience. The Morgan dealers would appear to have claims also.

All very interesting but any view the financial debacle feared by those loyal to Morgan seems now to be remote despite the failure of MMC to be be frank open and considerate to its customers.

There was also an awful lot of lost revenue from the whole fleet of Morgan hire cars being grounded. That would never be recovered, most of the lost sales hopefully would just be deferred sales.

Interesting assessment Haytop

It's a tough time to be selling discretionary motor toys heading into winter and very uncertain economic times, particularly in the UK
Let's hope it all goes well...

I just read the 2021 accounts. £1.182m was allocated against the recall for the 2021 financial year only with an estimate of a further £1m for FY2022. So looks like total cost for the recall is closer to £2.2m which i assume covers all the cars. Assuming the 1274 cars is correct, that equates to approx £1,730 per car which maybe sounds more realistic Haytop.

I find this odd but I suppose the 2021 accounts record future cost of this kind under some accounting convention. What do the notes to the accounts say by way of explanation of the provision.

Sorry to ask but I am rather busy with family commitments this week. Is there an experienced accountant out there who is able to assist please?

Here are some extracts from the A/C's. Auditors PWC did a commendably thorough job, but even they missed the typo "experimental" in place of that dreadful word "experiential" (para 2, line 3, in the Revenues).

Please note that these are purely my selection, as I find e.g. details of turnover by type/geography of interest.

Thanks for this.

The figures and notes seem to support my inference from the figure given in the Sunday Telegraph that there must have been some claim against a third party (the supplier of the master cylinder) for contribution - unless you disagree with my calculation (guess estimate) of the cost per vehicle).

There has been a suggestion in the past on this thread that the liability of MMC would be covered by insurance. I thought this most unlikely (the premium would be uneconomic). In any event the accounts show no insurance claim.

It will be interesting to see what is revealed if a buyer brings proceedings either personally or a part of a class action (now me). I continue to think that MMC are in line for shortlisting in the Gerald Ratner awards for customer relations.