Honda makes debut in Dealer Auction’s top 10 profit-turners

Honda has entered the top 10 brands list for the first time since the launch of Dealer Auction’s Retail Margin Monitor two years ago

With an average retail margin of £2,245, the Japanese super brand secured tenth place, joining fellow mainstream makes Kia and Nissan in January.

Land Rover drew the highest margin (£4,300), over £1,000 more than second-place BMW (£3,100). Volvo came in third (£3,025), closely followed by Mercedes-Benz (£3,020).

The top 10 follows a similar pattern to the 2023 annual round-up, released last month, saw more diversity between premium and mainstream makes in the top 10 than in preceding years – despite Land Rover ruling the roost for the third year running.

Dealer Auction marketplace director Kieran TeeBoon, commented: “It’s encouraging to witness the opportunities offered by both premium and mainstream makes. As we accelerate through 2024, against a volatile backdrop, this duality not only reflects the diverse consumer preferences but also underscores the importance of versatility. Dealers take note: catering to the spectrum of fast-changing customer demands is key to ensuring a profitable year.”

At model level, the Land Rover Discovery Sport topped the charts once again, with an average retail margin of £4,825, followed by the Volvo XC90 (£4,600) and Range Rover Evoque (£4,275).

While the 2023 round-up saw a clean sweep for luxury derivatives, January signalled more diversity, with the Nissan X-Trail and Škoda Superb claiming the ninth and tenth spots, respectively. The X-Trail hasn’t been seen in the Retail Margin Monitor since May 2023, while the Superb last appeared in 2022.

Another model that delivered strong returns was the sixth-place Mitsubishi Outlander. It clocked an average retail margin of £3,050, but it was notably the fastest seller in the top 10 and ranked with the highest average Auto Trader Retail Rating.

TeeBoon said: “It’s interesting to see these trends within the top 10 itself. The performance of the Outlander certainly makes it one to watch. While the market remains in a transitional period, it’s important that dealers don’t look back and instead embrace evolving market dynamics, using all the available data at their disposal.”

Perhaps conspicuous by their absence in the top 10 tables are electric models, with speculation that ambitious government-mandated sales targets have triggered aggressive price reductions on brand-new EVs – therefore pushing down used residual values on used electric models.

On this, TeeBoon said: “A more affordable used EV supply isn’t necessarily a bad thing for the industry as for some consumers they will present a more viable alternative to brand-new models. It simply means dealers need to be more savvy about where they seek those higher profit margins – and diversify their stock accordingly.”

Richard Walker, director of data and insights, commented: “The diverse range of vehicles in the Retail Margin Monitor showcase the many opportunities available to retailers right now. The number of visits to our marketplace reached an all-time high of over 85 million in January, which highlights how robust current consumer demand is.

“Given such positive market fundamentals, it’s disappointing to still see stock being priced under true market value, particularly of what we would call the best-of-the-best. By not applying a retail-back approach to pricing, retailers are at risk of selling themselves short and missing out on significant profit opportunities.”