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Average car dealer makes £46,000 profit in June - ASE

Mike Jones, ASE chairman

The average UK motor dealer made a profit of £46,000 in June. This is an increase of £3,700 over the profit made in June 2016 despite the drop in registration figures compared to the prior year.

As a result of the very strong first quarter profits for the current year to date remain ahead of the prior year, despite April and May’s underperformance leading to quarter two being behind the prior year by £10,500, said dealer performance specialists ASE.  

Chairman Mike Jones (pictured) said: “Overall year to date return on sales remains precariously above 1%, showing a marked decrease on the prior year as a result of the significant increase in average sales we have seen over the past 12 months.”

Profitability was once more driven by the vehicle sales department, albeit with minor improvements in overhead absorption continuing.

“Return on used car investment remains comparatively high, indicating the strength of this sector.

“Whilst stock levels are still high on the back of dealer self-registration, overall industry gross profit is still healthy at 13%.

“There remains no sign of the feared crash in used car residual values.

“However, we will continue to vigilantly watch for any early warning signs as we progress through the second half of the year.”

Quarter three performance has started slowly, with registrations down 9% on the prior year.

“Given the volume splits of the quarter we will only gain a true picture of performance once we have closed September.

“However, I would expect profits to follow a similar pattern as in prior quarters with underperformance in the first two months preceding a bumper bonus to finish,” said Jones.

> Franchised dealer profitability and performance figures

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