Car dealerships struggling to match 2013 profits, ASE says

Despite the growing number of cars being bought, dealerships in the UK are struggling to match last year’s profits, the ASE has said.

The organisation revealed that in the first month of quarter four, the average car dealer in Britain made a profit of £5,000, which is a drop of £4,000 on the same month in 2013. This comes in spite of the fact that both turnover and new and used car sales have increased in the past 12 months.

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ASE chairman Mike Jones did say that in October dealerships had proven successful in shifting the excess used vehicle stock held at the end of Q3.

Service department overall labour efficiency has continued to climb, building on the trend of the past 12 months. However, this is now reportedly being more than outweighed by increased overheads resulting in a fall in overhead absorption.

Mr Jones said: "Mitigating this fall will be vital for dealers, particularly given that high new vehicle targets for 2016 will put pressure on the vehicle sales department profitability."