THE average UK car dealer made a profit of £5,000 in January, according to figures from industry experts ASE – a figure slightly ahead of the result for the same month last year.
ASE say this represents ‘an encouraging start to the year’ given the strength of the first quarter in 2017.
ASE chairman Mike Jones said: ‘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. Used car performance remains strong.
‘The used car return on investment remains healthy. We saw a slight reduction in the average margin in January, however this was offset by an improvement in stock turn.
Better than expected
‘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.’
Jones mentioned that the new vehicle registration statistics for January and February were both better than expected, showing slight declines on the prior year.
He added: ‘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.’
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