The average UK car retailer made a loss of £13,700 in February, a very slight increase on the loss made in February 2016, £13,400 (Feb 2015: £13,500 loss).
A short number of working days with new car orders being taken, but not delivered until the following month once the plates have changed always means February is challenging.
“As a result of the outperformance in January we remain ahead of 2016 profitability on a year-to-date basis, but the overall picture will not become clear until after the first quarters’ results are published,” said Mike Jones (pictured), chairman of data providers and performance improvement specialist ASE.
“Profitability still lags behind 2016 on a rolling 12 month basis, however I am expecting an outperformance for the first quarter to redress some of the shortfall.”
Signs for March results look positive.
New vehicle sales (as well as registrations) have been ahead of 2016 comparatives for January and February.
“Anecdotal feedback has seen this continue into March, albeit not necessarily at the record levels of registrations reported.
“This should all lead to healthy bonus earnings for dealers.
There remains no sign of the new vehicle registration push causing major issues within the used car market, he said.
“Return on investment remained strong in February, with both January and February showing a healthy increase in used vehicle sales volumes. This has produced a further strengthening of the used to new ratio.
“Aftersales performance continues to steadily improve on the back of the ever-increasing vehicle parcs.
“Efficiencies are increasing with gross profit percentages remaining steady, driving in improving profits.”