August 2015 Dealer Profitability

Total Industry

In August, the average dealer’s profitability dropped away slightly, driven by an increase in expenses per new vehicle sold, to reach 1.6% for August. This was measured at 0.6 percentage points below the YTD net profit as a % of sales for August of 2.2%.  

State-by-State

Collectively, the states experienced mixed results in comparison to their July performance.

New South Wales/Australian Capital Territory

The NSW & ACT state group recorded NP%S of 1.8% and 2.1% for August MTD and YTD respectively, driven by growth in luxury and prestige profitability. Gross profits within the Service department were all down for August, offset by a relative increase in parts department gross profits. 

Queensland

QLD produced the strongest growth in NP%S for August, up 0.2 percentage points to 2.1% NP%S. This has caused the YTD NP%S to remain stable since July at 2.8%. A strong performance in Finance and Insurance has caused an increase in this department’s contribution to dealership income in August.  

Victoria/Tasmania

Despite stability in YTD NP%S within the Vic & Tas state group since July, NP%S for the month of August dropped away by 0.4 percentage points, to be recorded at 1.2%. This was driven by a drop in Prestige and Volume NP%S that offset growth in Luxury profitability. Finance departments worked hard in August to grow finance within their Used Vehicle departments, settling a growing number of used cars sold with associated finance contracts.  

South Australia/Northern Territory

Dealers in the SA & NT state group also experienced a slight jump in NP%S, up 0.1 percentage points at 2.0% for August. This result was parallel to the slight increase in the state groups YTD performance recorded at 2.4% for August. New vehicle finance in August grew, and contributed positively to profitability when coupled with an increase in income per contract.  

Western Australia

WA experienced a sharp decline in dealer profitability, down in August to be recorded at 0.3%. Though YTD NP%S for WA was slightly down at 1.5%, this figure remained relatively strong considering the weak August result for the state. Significantly fewer new and used vehicle sales contributed to this result.  

Segments 

All segments have experienced a shift in profitability throughout August, however the movement has only been minor.

Nationally, the luxury segment experienced positive growth throughout August, maintaining stability in the YTD results at 2.4%. This result was achieved despite fewer new vehicles sold with associated finance contracts in August.

The prestige and volume segments were less profitable in August, returning 1.6%. Movements in profitability throughout the departments were only very minor however, subsequently establishing YTD profitability since July. 

Click the chart below for more details.

Dealership data contained in this document has been obtained from the eProfitFocus database. Over 800 dealers across Australia have contributed towards this data. 

© 2015 Deloitte Motor Industry Services Pty Ltd

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