The average UK motor dealer suffered a loss of just under £7,000 for the month of July, marginally worse than their performance in the same month in 2016 (a loss of £6,500).
This is to be expected given the lower registration levels reported for the month and the lack of ‘fast start’ activity from many brands, said performance improvement specialist ASE in its monthly analysis of dealer key performance measures.
“We expect this trend to be continued through August and we will have to wait until the quarter closes for the final position to be settled,” said Mike Jones (pictured), ASE chairman. The average loss figure for July was £6,844.
“In the month of July we saw continued growth in used car retail sales from dealerships with margins taking a slight dip compared to June.”
Return on investment on used cars remains “healthy” at 88.5%, a significant improvement over the position at the start of the year.
Dealer stock levels remain high, driven by self-registration. However, there has been no increase in stockturn days through 2017.
“Aftersales revenues continue to grow and for the past couple of months we appear to have stemmed the decline in the retail labour percentage of total hours.
“I will be monitoring this closely to ensure the recovery continues as there remains a huge retail opportunity for retailers through increased red and amber work conversion.”
Many brands have realigned their expectations for the third quarter and the year as a whole.
“Hopefully the plethora of scrappage schemes we have seen launched will generate some incremental retail business, reducing retailers’ self-registration requirement to hit targets.
“Profits for the year as a whole should remain strong, albeit down from the records achieved in 2016.”
Video: Mike Jones on July's franchised dealer performance