May 2014 Dealer Profitability

Total Industry

• The Australian sales volume fell by 2.9% for May 2014 YTD when compared with the 2013 YTD figure. The NSW/ACT group being the only state group to improve on 2013 volumes as at May 2014 (up 1.1%) and the largest decline in volume was experienced by WA at 10.4% less volume compared with 2013 YTD figures. When comparing with April volume all state groups improved this month with the largest increase by the VIC/TAS state group.
• At a profitability level, compared with April figures, the total industry has improved 0.4 percentage points to 1.7% however this is a 0.3 percentage point drop on May 2013 profitability.

State by state

• All state groups bar WA enjoyed improved profits this month when compared with April. When looking at profits for the same time last year though, all states were behind, the one exception being the VIC/TAS state group.

New South Wales/Australian Capital Territory

NSW/ACT dealers experienced a 0.4 percentage point increase in profitability this month to 1.6%. While this is an improvement, it has left NSW/ACT dealers with the lowest profitability among the other state groups. As mentioned above, NSW/ACT dealers increased their throughput this month, however interestingly the average dealers grossed $400 less per new vehicle retailed. Comparing the new vehicle gross per unit figure of NSW/ACT dealers to the other state groups (at $2561), all other state groups were ahead except the average QLD dealer.

Queensland

At 1.8% NP%S, QLD dealers have the second highest profitability compared with the other state groups this month. This is an increase of 0.3 percentage points on April 2014 profitability. Though QLD dealers are behind compared to 2013 YTD volume, May volume is 13% higher than last month. This volume increase was at a cost of $400 gross per new vehicle retailed, in a similar experience of the NSW/ACT dealers.

South Australia/Northern Territory

SA/NT dealers were 3.5% behind 2013 YTD volume levels and 2.2 % behind May 2013 results. While profitability has improved for the average SA/NT dealer by 0.3 of a percentage point on April NP%S (supported by an increase of 13% volume),  it was still 0.2 of a percentage point behind the profitability level of May 2013. For the average dealer, dealership revenue was higher this month than May 2013 however greater employee efficiency across all departments meant the dealership retained slightly more profit at the bottom line in May 2013.

Victoria/Tasmania

The average VIC/TAS dealer enjoyed the biggest profitability increase on last month’s result with a 0.8 percentage point increase compared with the other state groups. Coupled with this, these states had the largest improvement in volume with a 23% increase. Compared with May 2013, profitability for the average VIC/TAS dealer increased by 0.08 of a percentage point this year. This is notable as it was the only state group to do so and off the back of a reduction in volume as well.

Western Australia

WA dealers were the only dealers to experience a decline in profitability from last month with profit falling 0.4 of a percentage point to 1.7% - this is also 0.2 of a percentage point below May 2013 profitability. While volume increased this month, a decline in other income (incentives) has meant that overall profitability has declined.

Segments

• There was an increase in profitability for all segments this month with the largest increase experienced by the luxury segment at 0.32 of a percentage point, taking it also to the highest profitability among the segments at 1.7%. The prestige segment is 0.1 of a percentage point behind at 1.6% with a 0.3 of a percentage point improvement on April profitability. At 1.5% the volume segment is another 0.1 of a percentage  point behind which amounts to 0.2 of a percentage point improvement from April profitability
• Comparing with May 2013 results, all segments declined in profitability. The volume segment experienced the largest decline at 0.5 of a percentage point. Comparing May 2013 to May 2014 there was an average drop of 1.3 units per salesperson in the new vehicle department, 1.7 units per salesperson in the used department as well as a decline in sales per employee in the back end. 

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