Inchcape’s UK trading profits were down “significantly” over the first half of this year as pre-registration activity put pressure on new and used car margins.
While Inchcape doesn’t separate out its UK financials from its European operations, Stefan Bomhard, Inchcape group chief executive, said positive results in Poland, Greece, the Balkans and its BMW business in Estonia helped to offset the declines seen in the UK.
Inchcape said the decline in the new car market of 6.3% in the first half of 2018 created a challenging back-drop for vehicle margins.
Bomhard said: “The first half trend for the UK business is consistent with the difficult trading in the second half of 2017, with a supply and demand imbalance and the resulting elevated level of pre-registration activity causing pressure on both new and used margins.
“The challenging conditions were exacerbated by our brand mix, with a high exposure to premium new vehicles that have a greater than market weighting to diesel powertrains and subsequently greater pressure on margins given the significant decline in diesel demand.”
Bomhard said Q2 had shown a better profit performance in the UK due to improved market momentum.