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Margin squeeze means dealer RoS set to fall - ASE

The average UK motor dealership made a profit of £3,800 in July, down from a profit of £6,400 made in July 2013.

Whilst these results are small in comparison to the quarter end results, they are likely to mark the end of the significant growth seen in dealership return on sales performance, says ASE which compiles the data from manufacturer composites.

Mike Jones, ASE chairman, said: "In financial terms we have now seen the total dealership rolling 12 month profit broadly static for the past five months at around £225,000.

"This would appear to be the new norm for average dealer returns and we are likely to see a continued fall in the return on sales percentage as dealers process increased registrations whilst still making the same profit levels."

As expected, whilst used vehicle return on investment has increased slightly during the month, ASE has seen a rise in used car stand in values.

This represents a combination of the disposal of low value vehicles traded in during June, the general rise in used vehicle prices and the increased volume of self registered vehicles, it said.

This is a trend we will be watching closely to ensure dealers’ stock profiles aren't skewed too much towards self registrations

Aftersales has continued its steady, if very slow, improvement with another gain in labour efficiency reported during July.

"August typically produces the largest loss of any month in the motor trade calendar and we will be watching the results closely to gain an insight into the extent which the current healthy registration levels are being forced with dealers counting the cost at a later date."


 



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  • Steve Freeman - 17/09/2014 09:46

    How can these be quoted as averages when ASE collate less than half of the uk automotive data? Hardly a fair sample with the likes of Honda, BMW, Mercedes, Hyundai, Renault, Nissan etc all missing

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  • Mike Jones - 18/09/2014 10:10

    Many thanks for your interest in the monthly profitability data we publish. In order to provide the best possible average of current dealer profitability we incorporate both brands where ASE provide the composite and those where we do not within the averages. Indeed some of the brands you mention request the averages from ASE on a monthly basis to incorporate within their internal reporting and to benchmark their own performance.

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  • Steve Freeman - 18/09/2014 23:38

    It's funny that you make such claims as I have recently spoken to a number of the below named brands who have no knowledge of sharing data with ASE, nor do urban science who produce the majority of the other brands. As you are quoting such a valid sample it would be good to have an independent body audit of the sample perhaps based on the fact you state it's a national average? I am sure you would have no issue with this based on the fact you make the previous statements.....

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    • Julie Boden - 27/09/2014 12:22

      @Steve Freeman -Once you have 40 years of Automotive knowledge at your fingertips and work with people of such high calibre and expertise that ASE possess I suggest you come back with a valid and sensible comment. Until then I suggest you continue with whatever it is you do, whatever that may or may not be.

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  • Mark Sherry Brennan - 25/09/2014 09:33

    This figure seems unrealistically low.... we regularly pay monthly commissions to dealers that far exceed this paltry £3,800 figure so those dealers would be losing money every month without benefiting from our added value services....can't be true - can it?

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