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Fifty of the top dealer firms at 'danger point'

Some of the largest dealer groups in the AM100 are returning the worst results on capital employed, suggesting they will have problems attracting future investors.

Piers Trenear-Thomas, of RSM Robson Rhodes which collaborates with Automotive Management in compiling the AM100, said the top 25 performing dealers by capital employed were doing “extremely well”, with “30-odd per cent return, rising this year”.

Mr Trenear-Thomas was speaking at a dinner where the new AM100 was revealed.

He said the leading 25 motor retail groups (judged on return on capital) provided a return enviable in any industry. They were better than some retail household names. The next 25 dealers on this assessment had an “adequate 15% return – enough to stay in business but without much spare for investment”.

But the remaining 50 were at “danger point”, returning less than 15% on capital employed. “Some of the largest groups are in this category and they are falling into negative returns,” said Mr Trenear-Thomas.

In the main, smaller dealerships were producing the best returns, which attracted investors. “The concentration on CMAs hasn't produced improved returns on investment,” he said.

Mr Trenear-Thomas urged dealers to “invest in new technology and in new ways of doing business” and said they would need to “match some competition with their long pockets”.

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