Vertu Motors has become the latest AM100 car dealer to publicise “an increasing disconnect” between new car registrations reported by the Society of Motor Manufacturers and Traders and the levels of real sales dealers are making to new car buyers.
The SMMT’s published figures, which do not split out the number of new cars registered by car dealers, manufacturers and daily rental companies, have clouded over a tightening of trading conditions since September 2014.
High market sales volumes continue to be driven by the strong push of new car product by vehicle manufacturers into the UK. This is due to the combined effects of the weakness of the Eurozone's new car demand, the strength of Sterling versus the Euro and comparatively robust business and consumer confidence.
In its pre-close trading statement to the London Stock Exchange, Vertu Motors said franchised dealers have been increasingly engaging in self-registration of vehicles to achieve the growing volume targets set by vehicle manufacturers, leaving them with brand new cars that they must sell as used stock.
As a result of these trends, Vertu’s statement said, its like-for-like private new retail sales volumes grew by only 0.5% in the five months to the end of January, compared to national private registrations reported by the SMMT as growing by 5.4% in the same period, however Vertu said its like-for-like gross profit per new retail unit has slightly increased.
Vertu said it grew like-for-like used vehicle sales by 6.4% in the five months to the end of January, however margins suffered and gross profit per unit declined slightly due in large part to competition against used cars from increased levels of nearly-new and pre-registered vehicles and very attractive new car finance offers.
Overall, the year ended February 28 2015 will be a record in volumes, revenue and profit for Vertu Motors.