Automotive retailers’ common return on gross sales (RoS) of 0.94% throughout a closely COVID-19 impacted 2020 has been hailed as “‘a really robust efficiency” by ASE chairman Mike Jones.
Compiling his month-to-month profitability KPIs for the sector, Jones revealed that, whereas schemes such because the Authorities’s Coronavirus Job Retention Scheme (CJRS) had not allowed sellers to match their buying and selling outcomes from 2019, they’d delivered a robust outcome nonetheless.
Again in November, Jones had reported that UK automotive retailers have been “inside touching distance” of the profitability they achieved in 2020 after delivering £110,000 profit-per-site in the important thing quantity plate change month.
However a return of COVID-19 lockdown measures throughout This fall hampered the sector’s restoration following its robust Q3 bounce-back.
Regardless of December’s continuation of lockdown measures throughout the UK, nonetheless, the typical automotive retailer misplaced “just below £3,000” within the final month of the yr, Jones mentioned, in comparison with £1,700 a yr earlier.
He added: “A slight worsening within the December loss lowered the return on gross sales barely from November’s outcome, nonetheless the general results of 0.94% for the yr represents a really robust efficiency, given the disruption to operations now we have seen throughout 2020.”
ASE’s knowledge confirmed that general revenue ranges have been down year-on-year within the automotive retail sector, however Jones mentioned that the outcome had been very franchise particular, with some manufacturers outperforming 2019.
The sector did see an enchancment in used automobiles and sure facets of their aftersales operations, in the meantime.
Regardless of being locked down for a good portion of the yr and compelled to function by means of dwelling supply or click on and gather, Jones mentioned that the trade returned an annual return on funding on used automobiles of over 80%.
He mentioned: “In case you simply have a look at the ROI for the durations when the showrooms have been open then the returns are over 100%, displaying the gorgeous efficiency from used automobiles in 2020.”
Jones warned that Q1 seemed as if it will show troublesome for automotive sellers, with the sector more likely to stay in lockdown till after the tip of our most essential buying and selling month.
However he reiterated Auto Dealer’s optimism that “we’re more likely to see a increase in buying and selling as prospects spend a few of the money they’ve saved in the course of the lockdown interval” as soon as the showrooms are reopened.
