The record return on sales achieved this year is continuing to climb higher, according to ASE, with the rolling 12-month return for an average frannchised dealership reaching 2.17% in July.
Retailers improved the month’s profitability by almost £14,000 versus July 2020, to £65,000.
Rob Jones, chief executive at ASE, noted that overhead absorption continued to rise during July, with almost two thirds of a dealership’s costs now covered by aftersales profits.
“We continue to see managed overheads with strong aftersales profits, even despite the MOT holiday hangover from the prior year,” he said.
Return on used car investment has reached 99.6% from 73.9% in July 2020, signalling the strong margins dealers have been achieving while stock remains constrained.
“Phenominally strong used car performance cntinued to be the principal driver behind the current strong profitability,” said Jones.
“Stockturn is now below the benchmark of 45 days, reflecting the strength of current market demand.”
ASE has warned nevertheless of the potential for rising costs.
July rpresented the first month when the COVID rates rebate started to taper off, although an anticipated spike in dealers’ costs was not the reality that emerged.
Keeping costs down will be vital to protect the recent gains made, warned ASE.