June saw the average UK motor retailer make profits of over £100,000 to round off a record performance for the first half of the year.
The June figure is in stark contrast to the losses recorded in the H1 2020 of £55,000, according to dealer profitability specialist ASE.
“This marks the end of a phenomenally successful first half of the year, with retailers recording record profits on the back of a strong retail market, healthy aftersales and reduced costs, primarily through government COVID support,” said ASE CEO Rob Jones.
But Jones warned that dealer costs are set to rise in the second half of 2021 with the ending of the government’s rates support and the winding down of the CJRS furlough scheme.
“We can also expect to see increased franchising costs as brands look to push out new programs. With new cars in short supply, this looks set to provide a double hit to profitability,” said Jones.
According to ASE used car return on investment is up to 94% for the rolling 12-month period and 151% if measured over the past three months.
“We have seen profit per unit continue to increase and stockturn shorten, reflecting the current stock shortages. With limited new car self-registrations, this situation looks set to continue into 2022,” said Jones.