January 2014 Dealer Profitability

Total Industry

Profitability for the average Australian car dealer started strong in 2014 at 2.3% for January - 0.2 percentage points higher than the December 2013 industry result. This result is also higher than the past 2 years' January figures with 2012 at 1.6% and 2013 at 2.0%.

State by state

At a state level the industry profit improvement for January did not translate into a increase in profit for all states.

Western Australia

WA dealers remained at a solid 2.3% NP%S in January, which is an improvement of 0.4 percentage points compared to 2013. WA dealers are extremely strong used dealers with an average of 30% contribution to gross profit. The average WA dealer is close to achieving benchmark for both unit sales and gross per salesperson, the dealers are only 0.5 units/salesperson shy of the 14 benchmark and $2,000 shy of the $37,800 gross/salesperson benchmark.

South Australia/Northern Territory

For the 5th consecutive month, dealers in SA/NT have had the highest NP%S figure on average amongst all the states. The average SA/NT dealer has strong new car gross at $3,100 and at 12.7 units sold per salesperson, are just behind the benchmark of 13 at 12.7. Coupled with this strong sales result, SA/NT dealers had the lowest new car expenses of the states at 71%.

Queensland

When compared with December, QLD profitability has improved the most among the states, increasing by 0.5 percentage points to 2.65%. This result was supported by strong F&I performance with the highest F&I income per employee figure of the states and $15,000 over benchmark at $69000.

New South Wales/Australian Capital Territory

NSW/ACT was the only state group to decline in profit this month, however it was extremely slight at 0.04 of a percentage point. It is mostly a good story for the average NSW/ACT dealership with improvement in all functions of their business. The decline was in relation to a 40% decrease in other income which could be pertaining to increased offers from manufactures on end of year sales. 

Victoria/Tasmania

While VIC/TAS dealers increased by 0.2 percentage points this month with a NP%S result of 2%, they remained the least profitable state. The improvement in NP%S was driven largely by greater efficiencies in the service department that translated to a 3% increase in service gross margin. Selling gross per chargeable employee improved by $1,000 compared with December data.

Segments

• The volume and prestige segment increased by 0.4 percentage points this month to 2.3% and 2.4% net profit as a percentage of sales respectively, however the luxury segment decreased by 0.1 percentage points to 2.4%.
• This was supported by an increase in throughput of 3% for the volume and prestige segments, and also marked the highest net profit for both segments since June 2013.

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