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Dealer losses average £13,000 in November 2016

A line-up of older used cars

Data from intelligence firm ASE has reported the average UK motor retailer made a loss of just under £13,000 for the month of November, a deterioration of £2,000 from the result in the prior year.

Mike Jones, ASE chairman, said: "The result is not as bad as forecast. Expectations were low as we have seen both the peaks and troughs in performance deepen throughout 2016, however this movement is relatively minor."

Turnover matched the result for November 2015, with a small growth in used car sales offset by a reduction in new car sales. Rolling 12 month profitability has now fallen below £175,000 per site for the first time since June 2013, with a £34,000 reduction year-on-year.

"New vehicle sales continued the trend we have seen in previous months, failing to match prior year levels, despite the increase in registrations. This provides tangible evidence of the change in the model we have seen accelerate over the past 12 months with dealers registering the cars themselves and then retailing them as delivery mileage used cars."

Used car performance continued to be strong in November, resulting in total vehicle sales being practically flat on a rolling 12 month basis. Used car profitability was also solid, with no sign yet of distressed selling hitting used car results. This trend appears to have continued into 2017, with strong prices being reported at some auctions.

Whilst 2016 proved a record year for registrations, it will not match 2015 in terms of dealer profitability. Increased targets have hit dealer results after a series of record years. 

> Trend analysis on franchised dealer profitability and performance

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