UK dealers saw profitability increase by 74% during Q2 this year, despite a slight slip in June’s performance, according to the latest figures from ASE.
ASE’s June data shows a return on sales figure of 0.9% of £41,000 on average, compared with 1.03% and £46,000 for the same month last year.
Mike Jones, ASE chairman, said: “Each of the three months delivered a profit in its own right and there were positive contributions from across the business.
“During June we continued to see a strong performance from used cars and aftersales. Used car stock levels increased by a lower value at the end of June than is normally the case, indicating a reduction in the level of retailer self-registrations. This clearly bodes well for profitability as we move into Q3.”
However, Jones also warned of the potential for new car stocking issues caused by Worldwide Harmonised Light Vehicle Test Procedure (WLTP) to cause problems in the second half of the year.
He said: “While this is very franchise dependent, vehicle supply is becoming a real challenge for some retailers.
“The lack of clarity over the tax implications of vehicles under the new regime is impacting fleet activity now, providing a real challenge for some to hit their Q3 numbers.
“Hopefully we will see further clarity soon as, without this, there is a real danger that retailers may have to undertake significant self registration activities to clear stock and hit their targets.”
ASE profitability figures for June 2018