July’s new car sales figures showing a rise of more than 11 per cent was a ‘good news picture’, said ASE Global chairman Mike Jones on a Car Dealer Live special today (Aug 5).
Normally broadcast at midday, Car Dealer Live’s edition for August 5 started at 9am with Jones as our guest to comment on the July new car sales figures as they were released by the SMMT.
He also gave Car Dealer an exclusive preview of some of the latest dealer profitability figures and chatted about the Car Dealer Top 100 – an assessment of the most profitable dealers in the UK – which is being organised in association with ASE Global and sponsored by GForces, and will be published on Wednesday, October 28.
Starting with July’s figures, which saw just under 175,000 new cars sold during the month, Jones told host James Batchelor: ‘It’s a good news picture. To be fair, it reflects what we’ve all seen as we’ve gone through the month, a lot of the activity post-lockdown, and there is some pent-up demand there.
‘It’s nice to break the series of drops that we’ve seen. We might actually see some better news stories in the mainstream press which can help with customer sentiment and general demand.’
Looking at the figures in detail, he said it was interesting to see that the majority of sales was in retail – 45.7 per cent – which reflected pent-up demand of the lockdown period now slowly being released.
Diesel sales fell while petrol was steady and the electrified vehicle sector showed big gains. ‘And that’s really what we’re going to see as a theme over the next few years as we get the consistent launch of new vehicles from all the brands,’ said Jones.
‘We’re going to see more EV derivatives drop into the market, replacing petrol and diesel.’
He added: ‘Overall on the July number it’s clearly a good news story and we should be celebrating that, but July is not the biggest month. Last year it made up just over half of the total number of registrations that we did in September.
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‘It’s a good story that we’re there and there were some significant increases among some of the brands, but we do need to make sure that we build that pipeline for September, because that’s the most important month as we go through the remainder of this year.’
Sales growth aside, Jones also commented that it was difficult for the UK government to bring in an incentive scheme while also backing a green agenda and driving UK manufacturing, since the cars it’d be wanting people to buy weren’t in general made here, so there’d be no trickle-down effect of the flow through of the cash, which instead would be going overseas.
Turning to the topic of dealer profitability, Car Dealer was given an exclusive preview of figures to be released later in the week, with Jones revealing that as regards the rolling 12-month figure for motor retailers, there was a marginal profit of just over £12,000, with a return on sales of 0.07 per cent.
Meanwhile, in the first half retailers on average made a loss of £25,000, with a £125,000 loss in the second quarter as they went through lockdown, although many made more money in June than they did in June 2019. Tough decisions would have to be made, he said, although there were opportunities in all areas, for example in aftersales with the big backlog of MOTs.
The interview finished with Jones saying why he was excited about ASE Global being involved with the forthcoming Car Dealer Top 100 and why it was so important within the industry.
‘It’s going to be ranked based on profit – the trade is permanently ranked at the moment based on turnover and turnover isn’t everything in this industry.
‘I think it’s going to be really, really interesting to combine the non-franchise retailers with the franchise retailers and people can start seeing where the most money in the industry is being made.’
And he was sure there would be surprises, with some automotive retailers ordinarily expected to be in the top 10 not figuring there at all.
Watch the interview in full and see what else Mike Jones had to say by clicking on the main image.
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