July profits impressive

Time 9:55 am, September 24, 2012

STATISTICS released by the ASE this month show motor retailer profits for July were up slightly over the same time last year.

Net profits as a percentage of sales hit 1.1 per cent – a 0.2 per cent increase over the same time last year – while average return on used car investment jumped from 76.9 to 88.8 per cent over the same period.

With July remaining one of the toughest months for motor retailers, these figures remain promising, says the ASE – stating that the industry ‘appears to be weathering the storm well’.

‘The source of the improvement remains the vehicle sales departments’, explained the organisation. ‘The average dealer is showing increased new vehicle sales and increased average used vehicle gross margin which is now 8 per cent up on 2011.’

A decrease in dealer and employee numbers may be helping keep the figures high – bringing up the average units sold, along with an average increase of 30 sales for every salesperson.

It’s these decreases in costs, says the ASE, that are helping keep retailers’ profits reasonable.

‘Sales per salesman have increased significantly and, as a result of cost control and a unit increase, average vehicle expenses per retail sale and as a percentage of gross have dropped significantly.

‘Maintaining this through the remainder of 2012 and into 2013 is a key.’

Jon Reay's avatar

Staff Writer Jon is one of the Car Dealer team's newest members. You can also find him contributing to AOL Cars.

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