The UK vehicle market is currently experiencing abnormal trading conditions, the effects of which have, so far, been favourable for most dealers. However, these advantageous circumstances could adversely turn — and very quickly.
Today, it’s more critical than ever for dealers to assess their overall business performance and proactively manage the impact of fewer used-car transactions and any other forthcoming change in the market.
To enable management teams to navigate change and understand where there is a significant financial opportunity for their business, APD Business Management has created a 25-point Dealer Management Health Check as part of its new industry whitepaper – How dealers can maximise profits in an uncertain market.
John Waring, CEO at APD, explained: “The abnormal super-profitability contributed by the used car ‘windfall’ for many dealers will have disguised shortfalls in performance across other critical areas of their business. The danger is that recent results could lead to complacency of not assessing all areas of the business, with dealers not seeing the forthcoming risks and taking actions in time to address changing market conditions.”
Pent up vehicle demand, combined with a buildup of new and then used stock resulted in extraordinary profits in the latter part of 2020 – making the third quarter one of the most profitable periods for some years.
Although the demand for new cars is still healthy in 2022, UK new car sales were down 37% in June compared to June 2019, and demand, as measured by enquiries for used cars, has fallen each month since February this year.
John continued: “Regardless of the cause, there is a clear risk to dealer-used car stocks both in terms of value and age. A survey of dealers’ accounts for June 2022 showed that over 20% of used units in stock are over 90 days old. The time for diligence and risk aversion has never been clearer as a rapid fall in values would have a significant negative effect on dealers’ bottom line and potential viability.”
The Dealer Management Health Check offers a broad, independent view of the business to show the key areas of operational opportunities across all departments of a retail automotive business.
For a limited period APD is offering dealers a free* 90-minute, 20-point Dealer Management Health Check when they download the whitepaper – How dealers can maximise profits in an uncertain market – APD Group Ltd (apd-group.com).