9:47 am, September 17, 2014
THE average car dealership made a profit of £3,800 in July, says ASE.
Figures from company show that despite the rise, profits were down £2,600 compared to July 2013.
ASE chairman Mike Jones said while these results are small in comparison to the quarter end results, they are likely to mark the end of the end of the significant growth seen in dealership return on sales performance.
He said: ‘In financial terms we have now seen the total dealership rolling 12 month profit broadly static for the past five months at around £225,000. This would appear to be the new “norm” for average dealer returns and we are likely to see a continued fall in the return on sales percentage as dealers process increased registrations whilst still making the same profit levels.
‘As expected, whilst used vehicle return on investment has increased slightly during the month, we have seen a rise in used car stand in values. This represents a combination of the disposal of low value vehicles traded in during June, the general rise in used vehicle prices and the increased volume of self registered vehicles. This is a trend we will be watching closely to ensure dealers’ stock profiles aren’t skewed too much towards self registrations.’
In aftersales, ASE says profits are ‘steady’.
Jones added: ‘August typically produces the largest loss of any month in the motor trade calendar and we will be watching the results closely to gain an insight into the extent which the current healthy registration levels are being forced with dealers counting the cost at a later date.’
