Retailer losses in November reduced from 2017, says ASE

Time 10:16 am, January 16, 2019

RETAILERS reduced year-on-year losses in November, outperforming the previous year by £10,000 and cutting losses to more normal levels at £8,500 per site, according to latest figures from ASE.

Mike Jones, chairman of the dealer profitability specialist, said: ‘November 2017 was a really poor month, with retailers clocking up record losses as they coped with the cooling market. This has not been replicated in 2018.’

There was a mixed performance in new car sales, he said. ‘We continued to see a wide variance in performance between franchises in November, with some retailers producing unseasonably profitable results on the back of product finally being released post WLTP-testing. This was countered by other retailers who continued to struggle with stock availability as shown by the registration statistics.’

Used car strength continued, though, said Jones. ‘Used car sales remained the star of the show in November, with retailers producing healthy sales volumes and gross margin levels. This department has really taken up the slack in 2018 with significant volume rises allied to a very healthy return on investment, which remains above 85 per cent, despite rising stock investment.’

The annual outlook was comparatively positive, he said. ‘Given all of the shocks and challenges the UK motor sector has had to deal with, it looks like the overall result for the year will be healthy and only slightly behind the overall result for the prior year. Given the WLTP challenges and general retail uncertainty, this shows the strength of the sector.

‘This is highly dependent on year-end bonus earnings, which will likely reflect the drop in overall registration levels. However, the strength of used cars and aftersales has enabled many retailers to more than compensate for the new car fall.’

MORE: ‘WLTP unwind’ provides a boost to dealer results in October

MORE: Steady start for third quarter as average retailer reduces losses

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