THE average car dealer lost a significant £15,000 in August, according to the latest statistics from motor industry services specialist ASE.
The loss has put the rolling 12-month return on sales below 1.5 per cent for the first time since March… but the company says it is confident that the trend will be reversed in September.
August is always a tough month for the UK motor trade with all eyes focused on September. Despite the strong registration statistics, 2014 proved no different, ASE said.
The £15,000 loss marks a £4,000 deterioration compared to August 2013 and shows that although plenty of metal is being shifted, profits are only being earned during fast-start or quarter-end months.
Turnover for July and August was 10 per cent up on the 2013 comparative and the registration statistics for September were strong so we should see profitability rise above 1.5 per cent once more, ASE said.
Used car performance improved slightly during August, with a fall in stock days and an improvement in return on investment. There is significant scope for both to improve further, however ASE will be monitoring for the effect of self-registered vehicles during September on results and stock mix over the coming months.
Aftersales performance remains largely static, with marginal gains in overall efficiency being balanced by increases in overheads to produce a slight fall in overhead absorption. With a raft of new CI programmes being implemented aftersales revenues will have to grow quickly to stop absorption falling back towards 50 per cent.