The new WLTP rules impacted that came into force in Q3 impacted the market in November with wide variances in performance between franchises.
According to dealer profitability specialist ASE November 2017 was a poor month, with retailers clocking up record losses as they coped with the cooling market.
“This has not been replicated in 2018, with retailers outperforming the prior year by £10,000 reducing losses to more normal levels at £8,500 per site,” said ASE chairman Mike Jones.
“We continued to see a wide variance in performance between franchises in November, with some retailers producing unseasonably profitable results on the back of product finally being released post WLTP-testing. This was countered by other retailers who continued to struggle with stock availability as shown by the registration statistics,” he said.
“Used car sales remained the star of the show in November, with retailers producing healthy sales volumes and gross margin levels.
“This department has really taken up the slack in 2018 with significant volume rises allied to a very healthy return on investment, which remains above 85% despite rising stock investment,” he said.
“Given all of the shocks and challenges the UK motor sector has had to deal with, it looks like the overall result for the year will be healthy and only slightly behind the overall result for the prior year.
“Given the WLTP challenges and general retail uncertainty this shows the strength of the sector. This is highly dependent on year-end bonus earnings which will likely reflect the drop in overall registration levels,however the strength of used cars and after-sales has enabled many retailers to more than compensate for the new car fall,” he added.