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”.