The average UK motor dealership produced a small loss of £384 in May, a contrast to the £5,000 profit made in the same month of the prior year.
This has created a further drop in the return on sales percentage which now stands significantly below the rolling 12 month comparative, according to dealer performance specialists ASE.
The average dealer now stands £27,000 behind the result for the first five months of 2014.
ASE chairman Mike Jones said: “Over recent months I have been highlighting a worrying trend as we see dealer new car sales falling whilst new car registrations continue to rise.
“This continued in May with sales down 5.2% compared to May 2014.
“This was in contrast to the SMMT reported registrations data which grew 2.4% year-on-year.
“Overall in the current year-to-date, whilst registrations are up 5.7%, reported dealer sales are down 2.9%.”
This provides “clear evidence” of an increase in dealer self-registrations in 2015,” he said.
Used car retail sales are up 6.1% year on year providing potential evidence of the liquidation of some of the pre-reg vehicles.
Total investment in used vehicle stock has fallen from its peak levels at the end of March as per the normal seasonal pattern.
Stock levels are, however, significantly above 2014’s comparative with stock investment 10% up.
“This continues to be due to an increase in both average stand-in-values which are 5% up and the number of units in stock.
“This combination is driving a significant decline in used car return on investment in spite of the increased volume of retail sales.”
Aftersales continues to improve slowly but steadily, with further marginal gains in overall efficiency.
This improvement continues, however, to be outweighed by an increase in overheads.
“The quarter-end result for June will clearly be pivotal in shaping the overall result for the year. Given the surge in registrations on day 19, I expect the gap between sales and registrations to grow.”
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ASE profitability stats
Jeremy has been a journalist for 30 years, 20 of which have been in business-to-business automotive. He was a writer and news editor on AM-sister brand Fleet News for three years before setting up the AM website. For the last five years he has been Bauer B2B’s head of digital helping to manage the digital assets of AM, together with Fleet News, Commercial Fleet, Rail and Smart Transport.
martin knowles - 08/07/2015 15:01
does this not show how out of touch the expert accountants are when it comes to benchmarks or kpi's