8:27 am, October 17, 2013
THE average UK motor dealer lost just under £11,000 in August – £250 more than they lost in the same month last year, according to ASE.
August has never been the strongest month for dealer profitability and despite robust new car registration statistics, 2013 was no different.
The combination of holidays, new cars pushed to the plate change month of September and the lack of annual bonuses which support the December results mean that August is the largest loss maker of the year.
Although dealers have performed slightly worse than they did in 2012, the market was taking off at this point last year and the current year loss of £11,000 is a creditable figure when judged against others.
According to ASE, August saw slight deterioration in overhead absorption and a marginal gain in vehicle sales expenses as a percentage of gross and no change in used vehicle return on investment.
ASE says it will be monitoring these ratios closely to ensure that the industry is not seeing a turning of the tide and the start of deterioration in motor dealer profitability.
The overall result for 2013 will be dependant upon the September result. However, the registration statistics indicate that the vast majority of dealers will have hit at least 100 per cent of their new vehicle target, producing significant bonus income.
‘Hopefully, the strong results for the year-to-date will see dealers able to hold out enough overachievement bonuses to support the losses as these vehicles are liquidated.’
