Car dealers made a profit of £53,000 on average in October, according to new figures out today (Dec 8).
Profitability specialist ASE Global said the month continued the trend seen during the summer, adding that profitability had significantly outperformed that of the previous October.
What’s more, for the first time since the spring lockdown, used car return on investment rose back above 80 per cent on a rolling 12-month basis, which ASE Global chairman Mike Jones hailed as ‘a stunning recovery’.
He said it showed ‘the strength of the used car market and the margins retailers have been earning since reopening.
‘Following on from September, used car return on investment was over 100 per cent for the month of October taken in isolation.’
Jones added: ‘Return on sales has risen to within touching distance of one per cent as a result of strong profits earned off a lower turnover level.
‘Whilst some of the improved performance will be as a result of early sales bonus recognition, the overall result remains very impressive.’
Aftersales performance also continued to be strong, despite workshops not being fully staffed and fewer hours sold.
Levels of profitability matched those of last year, and Jones said retailers had been successfully prioritising profitable work, getting more out of a lower volume.
However, November’s restrictions will hit year-end results, he warned.
‘The strong profitability recovery we have seen since June will undoubtedly be hit by the lockdowns suffered during November.
‘Whilst retailers are much more capable of continuing trade than they were in the spring, the closure of showrooms will increase November losses, even with the positive contribution from the furlough scheme.’