10:29 am, August 6, 2020
Car dealers lost £125,000 on average during the second quarter of 2020 after making a small profit as March ended, new figures officially published today (Aug 6) by ASE Global show.
The figure was exclusively revealed to Car Dealer yesterday (Aug 5) when Mike Jones, chairman of the dealer profitability experts, appeared on Car Dealer Live in a special morning edition that went out as the SMMT released the new car sales figures for July.
It meant that because of the lockdown they suffered an average year-to-date loss of more than £100,000 by the end of June.
ASE Global said today: ‘Whilst some retailers are still finalising their results, this shows the impact the shutdown had on the industry.’
June’s profit was up by 26 per cent, though, which ASE said was good news as performance that month had beat expectations.
ASE said that showed the strength of the recovery by the industry, with a £26,000 rise in profit on 2019, even though showrooms only began reopening as the month started – Scotland was the last UK nation to throw open its showroom doors again, which took place on June 29.
Reduced expenses, since a lot of staff were still on furlough, bolstered strong used and aftersales performance and ASE says this should continue in the third quarter.
The rolling 12-month return-on-sales figure for June was just above break-even at at 0.07 per cent – again revealed exclusively by Car Dealer yesterday.
ASE said: ‘Whilst this is a significant drop, it does show the positive impact of the business model and the furlough scheme in that the average retailer would still emerge from 2020 with a small profit, despite the chaos of the pandemic. Many will beat this if the strength of June and July continues.’
Losses were attributed mainly to fixed costs for sites, since dealers had been able to cut variable expenses such as salaries.
You can watch the video, where Jones talks about the July figures plus dealer profitability and the forthcoming Car Dealer Top 100 by clicking the image at the top of this story.
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