Network of dealers sees major increases in profit

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According to dealer profitability specialist ASE, the average vehicle dealer made a profit of more than £200,000 in the rolling 12 months to June of 2015. The overall performance was significantly driven by activity in June, with the average site making a profit of £43,000 in that month alone. This reflects a change in market performance as it is the first time this year that the dealers have exceeded their result for 2014. It reflects a turnaround in the recent decline of overall rolling 12 month profitability.

The increase in profitability in June was accelerated by new sales and Q2 registrations bonuses. The industry saw an increase in vehicle sales of £15,000, which more than made up for the £6,000 increase in expenses. The year on year profitability in Nissan’s UK dealer network rose by 66% in Q2 with the dealership citing new car sales as the biggest contributor. Nissan has seen new car gross profit increase by 42.9% for the year. The brand has also highlighted a strong performance in May, with the service department gross profits up to 12.2% and the parts departments seeing a 9.6% increase.

Overall, 35% of the network made a 2% return on sales, and the number of dealerships incurring losses was halved. The continued rise of the automotive market and growth of sales is contributing to an improved bottom line for UK dealers. They are repeatedly making significant investments in the future of their brands and the thriving market is leading to healthy returns.

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