11:51 am, July 8, 2021
Dealers made a profit of more than £60,000 on average in May and bucked the usual trend, according to figures out today (Jul 8).
ASE Global said in its latest statistics report that May was traditionally a tough month for auto retailers but they defied that this year.
The bumper profits also drove the return on sales to 1.45 per cent.
It commented that although the figure was helped by the early recognition of some bonuses, it showed the health of the sector’s current profitability despite new car supply shortages.
‘The strong May performance was particularly shown by the premium retailers, who delivered a very strong performance for the month,’ said Robert Jones, chief executive of the profitability experts, in the report.
‘Some of these franchises are producing unprecedented used car profitability, which is accentuating the strong new car performance and reduced costs.’
He added that the used market remained buoyant, saying: ‘The used car market continued on its recent track of delivering record profitability levels.
‘Margins remain very strong, with increased purchases prices being successfully passed on to the customer.
‘As yet there is no sign of this ending, and with the continued new car supply shortages limiting the supply of late-plate vehicles, this is set fair for the foreseeable.’
Looking further ahead, though, Jones said things weren’t so rosy.
‘Motor retailers have undoubtedly benefited massively from the government’s support schemes, which started to tail off from the end of June.
‘This will see costs rise and it will be a real challenge to maintain current profitability levels, particularly given the new and used car shortages we are seeing.’
