‘Staggering’ 2009 performance boosts dealer fortunes

The average motor retail outlet made more than £130,000 in 2009 – a return of 1.3% on sales and a remarkable turnaround in fortunes.

Service provider ASE reveals that with 2008 proving to be the most difficult year since it began collating average dealer performance figures in 2001, last year’s performance was “staggering”.

“The average dealership saw a great start to 2009 driven by a strong rebound in the used car market, the positive effects of cost cutting in 2008, the VAT reduction and scrappage scheme,” said Mike Jones, ASE partner.

“Whilst dealers are selling lower volumes, they were getting back to basics and selling vehicles profitably.

These results will change as the effects of head offices and final adjustments are put through audited accounts.”

Net profit as a percentage of sales in 2009 was an average 1.3%, compared to -0.2% in 2008. And sales per salesperson was 176 units compared to 144.

Smaller dealers benefited particularly last year, with the top performing dealerships, as a % of sales, reporting less than £6 million in total turnover compared to an overall average of £10 million.

“This reflects the much-improved performance of some of the smaller brands that optimised their response to the scrappage scheme bringing strong performance for both the brand and the dealer.”

There remain concerns: overall labour efficiency fell below 80% for the first time (79.9% compared to 82.9% the previous year) and there was no movement in hours-per-job-card.

“Improvements in both areas will be vital in 2010 and 2011 as dealers look to migrate the effects of the decreased vehicle parc,” Jones said.

“Dealers need to make progress towards turning service reception into a sales department focused on customer upsell.”