9:08 am, April 13, 2011
THE average car dealer reported a £6k loss for February, ASE’s latest retail profitability statistics reveal.
The company says that while the results seem poor, February is ‘a traditionally quiet month’ and that February 2011’s results were ‘broadly in line with 2010 despite the lack of scrappage sales.
It was also revealed that many dealers across the UK pre-registered many vehicles to hit target. ‘We would normally be very concerned over the dealers’ ability to successfully retail these vehicles,’ said the firm., ‘however they may well be helped in 2011 by a shortage of new vehicles as a result of plant closures following on from the Japanese tsunami.’
ASE urged dealers to concentrate on expenses as a percentage of gross profit and overhead absorption. The expenses ratio is running ahead of ASE’s benchmark, with the sales departments being of particular concern.
Meanwhile in overhead absorption, ASE recognises that while dealers are making progress in retaining used customers and extending their new vehcile customers beyond their traditional three year life, this is being ofset by declining vehicle parcs and increasing overheads.
Looking ahead, ASE believes that April is set to be a tough month due to an additional bank holiday. ‘Profits will have to be made in the first three weeks, particularly if the sun shines.’
