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Average dealer lost £3,000 in December but it was a ‘great month’ given 2020’s challenges

Time 3 months ago

The average car dealer lost just under £3,000 in December 2020, latest figures from ASE Global reveal.

The firm’s Car Retailer Profitability report shows that along with the loss the average car dealers suffered, return on sales was down too.

However, according to ASE Global chairman Mike Jones, used car performance remained strong in December and the month was a ‘great result’ given the challenges of 2020.

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‘Historically December has been a tough month for UK motor retailers, with Christmas reducing both the number of working days and focus,’ he said in the report.

‘The furlough scheme undoubtedly helped retailers minimise losses incurred during the month, with the average retailer losing just under £3,000 which represents a slight increase on the loss of £1,700 for December 2019.

‘This is a great result given the lockdown.’

Return on sales was down just under one per cent at 0.94, and while that dipped slightly from November, Jones said it ‘represented a very strong performance, given the disruption to operation we have seen during 2020’.

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Jones added: ‘Overall profit levels were down year-on-year however this is very franchise specific, with some brands actually outperforming 2019.’

Looking ahead to dealers’ profitability in 2021, Jones said: ‘Q1 undoubtedly looks like it will be difficult, with the sector likely to remain in lockdown until after the end of our most important trading month.

‘Once the showrooms are reopened we are likely to see a boom in trading as customers spend some of the cash they have saved during the lockdown period and they decide to come out of some of the leased vehicles extended in 2020.’

James Batchelor

James – or Batch as he’s known – started at Car Dealer in 2010, first as the work experience boy, eventually becoming editor in 2013. He worked for Auto Express as editor-at-large and was the face of Carbuyer’s YouTube reviews. In 2020, he went freelance and now writes for a number of national titles and contributes regularly to Car Dealer.

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