January 2014 Dealer Profitability
Amelia Taylor | 26 February 2014
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.
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%.
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.
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.
- 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.
Please click the image below to view the entire presentation.
General Information Only
This presentation contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively the “Deloitte Network”) is, by means of this presentation , rendering professional advice or services.
Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser. No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this presentation.
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities (collectively, the “Deloitte organization”). DTTL (also referred to as “Deloitte Global”) and each of its member firms and related entities are legally separate and independent entities, which cannot obligate or bind each other in respect of third parties. DTTL and each DTTL member firm and related entity is liable only for its own acts and omissions, and not those of each other. DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more.
Deloitte Asia Pacific Limited is a company limited by guarantee and a member firm of DTTL. Members of Deloitte Asia Pacific Limited and their related entities, each of which are separate and independent legal entities, provide services from more than 100 cities across the region, including Auckland, Bangkok, Beijing, Hanoi, Hong Kong, Jakarta, Kuala Lumpur, Manila, Melbourne, Osaka, Seoul, Shanghai, Singapore, Sydney, Taipei and Tokyo.
This communication contains general information only, and none of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms or their related entities (collectively, the “Deloitte organization”) is, by means of this communication, rendering professional advice or services. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser.
No representations, warranties or undertakings (express or implied) are given as to the accuracy or completeness of the information in this communication, and none of DTTL, its member firms, related entities, employees or agents shall be liable or responsible for any loss or damage whatsoever arising directly or indirectly in connection with any person relying on this communication. DTTL and each of its member firms, and their related entities, are legally separate and independent entities.