12:18 pm, April 28, 2023
Sytner Group’s American parent company Penske saw its gross profit for automotive sales rise by one per cent to $1.1bn (£883m) during the first quarter of this year after rolling out agency sales in the UK.
The Michigan-headquartered automotive group’s newly published results for the three months to March 31, 2023 show that global automotive retail revenue increased by four per cent to $6.3bn (£5.05bn).
Meanwhile, overall revenue at the international transportation services company, which also owns the CarShop used car centres, went up by 5.5 per cent to $7.3bn (£5.86bn), which it hailed as a quarterly record.
Of that total, the UK contributed 33.7 per cent of the revenue. The CarShop centres globally accounted for eight per cent of the revenue.
However, net income fell by almost a fifth to $298.3m (£239.4m) from $367.9m (£295.2m), while EBITDA dropped from $546m (£438m) to $461.6m (£370.4m) – down by 15 per cent.
The gross margin in automotive sales was 16.9 per cent – down by half a percentage point on the corresponding quarter last year.
At the beginning of the year, Mercedes-Benz – which is one of the brands it represents – switched to the agency model in the UK, which sees dealerships receive a fee for each new vehicle sold by the manufacturer.
Agency sales, including other unnamed brands, stood at 6,933 units, with Penske making $2,128 (£1,708) gross profit per vehicle sold.
What’s more, according to Autocar, every Mercedes new car agency sale last month made Penske an average gross profit of £3,125.
The automotive group shifted a total of 47,662 new cars excluding agency and 67,836 used over the three months, with new sales (not including agency) up by 4.7 per cent on last year’s figure of 45,528 but used down by 0.6 per cent on 2022’s quarterly total of 68,231 – an overall rise of 1.5 per cent..
Gross profit per new car excluding agency was $6,315 (£5,065) and gross profit per used car was $1,808 (£1,450).
Chairman and CEO Roger Penske said: ‘I am pleased to report a strong first quarter. Despite higher interest costs, inventory challenges, and other inflationary cost pressures, our performance continues to demonstrate the benefits of the company’s diversification and the strength of its business model.
‘Automotive retail and commercial truck retail demand for new vehicles remains strong while same store service and parts revenue increased 14 per cent from retail automotive operations excluding changes in foreign currency exchange, and increased 11 per cent from commercial truck operations.
‘In addition, I am pleased that strong expense control produced a ratio of SG&A [selling, general and administrative expenses] to gross profit of 67.5 per cent, including a sequential decline of 140 basis points when comparing the first quarter of 2023 to the fourth quarter of 2022.’
Pictured via Google Street View is Sytner’s Mercedes-Benz dealership in Newcastle upon Tyne
