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Franchised dealer average profit broke March records

Finance: profit risk and loss

The average March profit for a franchised dealership reached a record in 2016.

ASE reports that the average UK motor dealer posted a profit of £98,900 for the March, a 6.5% increase on the prior year and the largest ever average monthly profit for UK dealers.

This resulted in profitability for the quarter closing out 8% higher than the prior year.

“In the month of March it was reassuring to see that all of the activity undertaken during the first quarter was not in vain,” said ASE chairman Mike Jones.

“In spite of this profit increase we have seen a continued decline in return on sales compared to the prior year as a result of continued rise in turnover.

“We also saw a continued increase in new vehicle sales and dealer self-registrations, however we are pleased to note that in March this was much more heavily weighted to an increase in sales.

“Whilst registrations rose by 5.4% in the month, dealer new car retail and fleet sales rose by 4.6%. This marks a significant change from 2015 where the increase in registrations was matched with a slight decrease in dealer sales.

“There are undoubtedly still a significant number of self-registered vehicles in the market requiring disposal, however there is no evidence that this side of this issue is increasing out of control.”

ASE said used car retail sales also grew in March by a modest 2.8%. Average used vehicle gross profits rose to the highest stand-alone monthly level in two years.

“Aftersales continued to improve steadily, if very slowly. We continue to see a creep upwards in overall labour efficiency and are now worried about whether dealers are training enough apprentices to cope with future demand,” said Jones.

> Historic franchised dealer performance figures from ASE

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