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Dealer profits at £2,600 in January, Q1 'could be record for registrations' - ASE

Mike Jones, ASE chairman

The average UK car retailer made a profit of £2,600 in the month of January, beating the result from January 2016 when the figure was just £182 in the black.

“We will only get a full picture of performance once we have closed the first quarter, however initial indications are good, with the market set to outperform the prior year, in registration terms at least,” said Mike Jones (pictured), chairman of dealer performance specialists ASE.

"In many cases we saw a continuation of 2016’s trends in Janaury.

Registration levels were pushing ahead, he said, with new car sales lagging behind and genuine retail sales falling.

Self-registered cars continue to be remarketed as used cars, pushing the rolling 12-month used to new ratio up above 1.1 to 1 for the first time.

"There is no sign yet of excessive pricing pressure on used cars as a result of this, with auction prices remaining strong and many groups out actively buying.

"We will continue to watch the used vehicle stockturn and return on investment ratios closely to ensure that stocks are being cycled and margins are remaining strong."

Aftersales also followed the trends from 2016, with further growth in retail hours and overall efficiency.

"We expect this to continue throughout 2017, irrespective of what happens to new vehicle registrations, providing a significant break on the fall in overhead absorption we have seen over recent years.

"Q1 2017 looks like it will produce a record registration quarter, which should bring a boost to profits. We will wait to see whether it is one last hurrah or if the temptation to continue to push UK market registrations proves too great."

> Franchised dealer performance KPIs

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