UK motor retailers matched their performance from February 2018, producing a loss of £19,600 for the month, according to figures released today by ASE Global.
The dealer profitability specialist said that February was always a tough month for motor retailers here, thanks to fewer working days, frequently inclement weather, and all focus really on hitting the March target.
Mike Jones, chairman of ASE, said: ‘We noted in January’s report that used car stock levels were running high at UK motor retailers. It was pleasing, therefore, to see a reduction in stock investment of 13 per cent by the end of February. This is an area which still needs to be monitored, with stock investment currently 17 per cent up year-on-year.
‘Given the significant used profit opportunity, this is not necessarily an issue but the cars must be kept moving.
‘After years of rising overhead costs, for the past two months we have seen a stability in the overall back page cost. For the majority of brands we have seen the end of the significant facility cost increases, and while there may be a rise as a result of increasing utilities cost, we should see growth in overhead absorption as a result.’
He added: ‘The result for March remains uncertain. The overall registration level looks like being three per cent behind the prior year, with similar levels of self-registrations as we saw in 2018. There is, however, significant variance between brands, with double-digit gains and falls among different franchises.
‘Used car and aftersales profitability should provide a solid platform for profit improvement, particularly when allied to the stable cost base. The key will, however, be new car profitability and the all-important bonus earnings.’