Profitability at Vertu Motors will be significantly ahead of expectation for the four months ending June 30 2009, said its chief executive Robert Forrester.
He added that the new car market is showing signs of resilience aided significantly by scrappage. However, volumes of new car sales have been constrained by a scarcity of new vehicle stocks.
Vertu has continued to grow market share with new retail car volumes in the same four months, down 15.6% compared to a 19.9% fall in the registrations of new private vehicles in the same period.
Forrester said that as a result, Vertu had earned “significant” volume bonuses at the end of June.
Used car margins improved
Used car margins have improved year-on-year.
“Vertu saw like-for-like used car volumes up 7.1% in the four months ended 30 June 2009 compared to the previous year. Overall used car profitability is significantly ahead of last year’s levels in the period,” added Forrester.
CV market remains depressed
The new commercial vehicle market remains depressed with registrations in the four months ended 30 June 2009 down 43.9% on the prior year.
Forrester said while Vertu’s Iveco operation has outperformed the market in volume terms, margins have also been reduced due to the pressure of stocking levels. In addition, reduced after-sales volumes are apparent as customers’ vehicles experience reduced wear and tear due to lower usage levels as the economic slowdown progresses.
Consequenctly, Iveco has not reached expectations in the period.
Vertu is continuing to drive customer retention and satisfaction initiatives in the after-sales market.and said this area has performed satisfactorily.
Most recently, Vertu has purchased an occupied dealership in Mansfield which will open as a Honda dealership on August 1. It is the fifth Honda site for the group and will complement its existing Honda businesses in the adjacent territories of Grantham and Retford, said Forrester.
It also acquired three dealership from the administrators of Brooklyn Motors in June.