June proved a successful month for the UK motor industry as car dealers pocketed an average £46,000 in profits, new figures show.
According to new data from the automotive finance firm ASE, the figure is a rise of £3,700 compared to the same month last year – despite a continuing drop in new car registration levels.
Driven by the “very strong” first quarter start to 2017, profits for the current year to date remain on track to surpass last year, even though there was an underperformance in April and May. However, despite the buoyant average profits for UK car dealers, overall year to date sales figures remain a little above 1%, a drop on the previous year, driven by an increase in average sales.
ASE said dealers’ June profit books were driven largely by vehicle sales teams and supported by small improvements in overhead absorption. ASE chairman Mike Jones said: “On average the UK dealer had a very good month of June, producing a profit of £46,000, which is actually up on the profit they made in the same month of last year.
“Overall result for the quarter was down by just over £10,000 compared to last year, mainly as a result of those lower registrations with us tending to see now poor performance in month one and two of a quarter and a strong performance in month three.”
Mr Jones added that performance from used cars remained extremely strong, with return on investment at over 80%.
Figures from the Society of Motor Manufacturers and Traders (SMMT) continue to show drops in new car registrations, in a possible sign of motorists’ waning confidence as Brexit approaches. SMMT data for July 2017 shows 161,997 registrations, a fall of 9.3% on the same month in 2016. So far this year, there have been four back-to-back monthly falls in registrations.
Yet, despite the drop, demand for low emission vehicles continues to rise, spiking 64.9%in July with 8,871 new cars bought. So far this year, close to 70,000 alternatively-fuelled vehicles have been snapped up by consumers.
Are you a car dealer benefiting from these better profits and higher turn over’s? Make sure your car dealers insurance is up to date and covering you for the level of trade you are carrying out!