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Self-registrations warning amid tumbling car dealer profits - ASE

The average UK motor dealer made a loss of £59 for the month of January, a deterioration of over £9,000 on the profit made for the same month in 2014.

This has produced a significant drop in the rolling 12 month return on sales ratio which has fallen to its lowest level in over a year, says dealer profitability specialists ASE.

"New vehicle sales levels were marginally down on the prior year in the month. Given the official registration statistics for January showed a growth of 6.7% on January 2014 we can see tangible evidence of an increase in self-registered vehicles now coming through the figures," said Mike Jones ASE chairman.

Used vehicle volumes performed slightly better than new being marginally up on January 2014 however growth profit was down at 10.5%, its lowest level in recent years.

"This was a result of high average stand in values and profit per unit falling below £1,000. We remain very concerned about the impact self-registered cars are having on used car stock profiles with average stand in values rising in January as the cars registered in September 2014 enter mainstream stock available for sale."

Service hours were static in January albeit with a further improvement in overall efficiency.

"A key indicator to 2015 financial results will be performance in the pivotal first quarter. Whilst we will produce an increased level of registrations it looks like this will be through fleet and self-registrations and therefore at the expense of profit."

ASE dealer performance stats

 



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Comments

  • Martin Moore - 13/03/2015 08:45

    what about all of the prestige brands that are making in excess of £100,000 per month?? These numbers can't include these as it would suggest other businesses are losing significantly more......somehow we need someone to produce an accurate average, perhaps the IMI could confidentially collate this so we all know where we stand? How is everyone else out there finding it as our volume dealerships (mainly Ford) are performing well above the vague numbers presented here?

    • Jim Reid - 22/03/2015 17:31

      @Martin Moore - Hi Martin I agree! Although we are not a Franchise dealer it is helpful to compare what we are achieving against similar sized dealerships however this doesn't seem to be the case with these results! A breakdown of franchise sizes types and results for small , med and large independent would be useful too

  • Paul - 25/03/2015 13:26

    I agree these comments are only marginally useful we need intelligent commentary that would add real value or insight.

  • G60Tim - 25/03/2015 13:32

    I suspect ASE and the likes would be happy to give the drilled down info and insight to those willing to pay for it. Manufacturers might not allow it outside their own franchisees though.