The average dealer delivered profitability of £5,000 in January according to dealer profitability specialist ASE, which looked at the performance of hundreds of dealers across the UK.
ASE chairman Mike Jones said it was a good start to the year he would have to wait to see how dealers fared in March to get a clear picture on where the market was going.
“Looking at the figures in more detail, we can see an increase in the variance in performance between brands.
This reflects the results exhibited in the registration statistics, with some franchises suffering significant drops in sales, which is naturally feeding through to reduced profitability. This is expected to continue as we go through the year,” he said.
Dealers continue to benefit from a strong used car market with a “healthy” return on investment. There was a dip in the average margin in January but this was offset by an improvement in stockturn.
“The used to new ratio continued to grow, a trend which I expect to see continue as we see increasing used car sales whilst new sales reduce slightly,” said Jones.
“The new vehicle registration statistics for January and February were both better than expected, showing slight declines on the prior year. Given the strength of the first quarter of 2017 I had been fearing a larger drop off, and we will have to wait and see whether this is the case in March. It is also good to see the profitability performance for January, slightly beating the prior year comparative.
“It is, however, far too soon to draw conclusions about the overall quarter as this will depend on performance in March and the “Beast from the East” will certainly not have helped us compete with what was a phenomenally profitable month in 2017,” he said.
