A £9,900 improvement in April profits for car dealers could be an indicator of “the real prospect of a period of comparative prosperityâ€, according to ASE.
The average UK motor retailer reflected the upturn in the new vehicle market and the continued strength in used car retailing to produce a strong performance for the month of April, ASE chairman Mike Jones said in his monthly report on dealer profitability.
Jones said: “Whilst it is certainly too soon to celebrate April as evidence of a permanent return to improving retailer profitability, it was nice to see an out-performance compared to the prior year after a year of watching declining profits.
“May registration levels also showed signs of growth, therefore there could be the real prospect of a period of comparative prosperity.
“I expect to see continued growth in used car sales and service hours which should deliver a positive boost in what has historically been a poor performing month.â€
Used cars and aftersales performance were highlighted as the key drivers to the uplift in dealer profitability.
ASE’s report said that retailers’ used car departments had delivered an additional £10,000 gross profit in the month, through a combination of increased volumes and a slight improvement in gross profit per unit.
Whilst stock levels remain historically slightly high, retailers did a good job of destocking in April and I would expect this to continue as we move through Q2, it said.
Aftersales profits were up £6,000, meanwhile.
ASE said that this was driven by an increase in hours sold which in turn drove up labour sales income.