Dealers made £52,000 profit on average during July, latest figures show, clawing back more than half of the losses they suffered during the second quarter.
Profitability experts ASE Global said today (Sep 8) that it showed the strength of the bounce back that retailers had been enjoying since showrooms reopened across the UK during June.
In addition, the rolling 12-month return-on-sales figure went up to 0.35 per cent from June’s 0.07 per cent and the corresponding break-even month in 2019.
Chairman Mike Jones said: ‘Whilst there is still clearly significant catching up to do, it shows that even with the two-and-a-half-month lockdown, motor retailers should still post an average profit for 2020.’
Meanwhile, ASE said the used car market had proved to be ‘phenomenally strong’ ever since lockdown was lifted, reflected by the 12-month used car return on investment that was now back up to 73.9 per cent. This was in spite of assets effectively not generating a return for more than two months of the year.
Retail profit per unit is at record levels and significant stock write-downs haven’t been needed, either.
Jones added: ‘July’s strong profitability appears to have continued through August and into September, with both sales and aftersales performing strongly.’
However, the fourth quarter of the year is looking more uncertain and the future ‘less rosy’, he said, thanks to the impending end to the furlough scheme and rise in cashflow pressures.
‘Retailers need to concentrate on making hay now whilst the sun is definitely shining,’ he said.