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Dealers suffer biggest loss in last 12 months in August - but outperform 2015

Mike Jones, ASE chairman

The average retailer lost just under £15,000 in the month of August.

This was the largest loss in the last 12 months, according to performance specialists ASE, but at £14,871 was £1,000 less than the amount lost in August 2015.

Continuing a trend, turnover levels were up, reflecting the increased level of registrations.

This produced a further fall in the rolling 12 month return on sales percentage which is down to its lowest level since 2012.

“It will be interesting to see whether the September performance is strong enough to reverse this trend or whether we will continue to see the ratio track downwards towards 1%,” said Mike Jones, ASE chairman.

“Ever since the switch to two registration months a year, August has produced the largest single loss of any month.

“In addition, during 2016, we have seen an increase in the size of the peaks and troughs in profitability as retailers process an ever greater number of vehicles, only making profit when they have earned the associated volume bonus.”

Used car performance remained strong in August with no sign of the volume of self-registered vehicles and PCP returns have a material adverse impact on performance.

“Dealers successfully destocked during August in advance of the influx of vehicles in September through part exchanges and dealer registrations.

“September profitability performance will be a key driver in the overall result for the year, although given the volume of cars registered at the end of the month, we will likely have to wait several months before we see the full picture.”

> Franchised dealer peformance figures for August and historic comparisons.

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