10:44 am, March 19, 2014
UK motor retailers made an average profit of more than £9,400 in January – nearly doubling the profit they made in January 2013, according to the latest figures from ASE.
The figure is particularly impressive because 2013 also produced a strong performance compared with previous years, says the automotive solutions provider. And January has been seen as one of the quieter months ever since the move to two registrations a year.
A statement from ASE said: ‘Whilst the lack of significant snowfall across the country certainly helped the aftersales department, it is once more vehicle sales which has driven the improvement in performance.
‘Looking at the comparison to the rolling 12-month picture at the end of January 2013, we can see that the return on sales has increased from 1.17 per cent to 1.49 per cent. At the same time, overhead absorption has remained static at 56.7 per cent.’
The key driver behind the increased profit remains the drop in the proportion of gross profit spent in the vehicle sales department, which has remained at just over 62 per cent, says ASE. As average turnover levels are increasing, reflecting the increased volume of vehicles being sold (as well as registered), the financial contribution from the vehicle sales department continues to grow.
ASE added: ‘As a result, the average dealership has now made a profit of over £210,000 on a rolling 12-month basis. The short-term outlook will be heavily dependent on the result for March and whether dealers can match their 2013 profit for that month of £79,000. Whilst we can only wait and see, 2014 has certainly started promisingly.’
