October 2013 Dealer Profitability

Total Industry

• October saw a decline in dealer profitability compared to the prior month, with the result at 1.5%. While this decline was in part due to quarterly incentive payments pushing up the September result, the total industry average dropped by 0.03 percentage points
• The October result also remained below the YTD NP%S of 2.0% with dealers continuing to be less profitable in the second half of the year

State by State

• WA and VIC were the only states to maintain profitability around the same level as September. The average dealer in WA saw a marginal decrease of 0.02 percentage points in NP%S, with the October result at 2.2%. Conversely, the average dealer in VIC saw a marginal increase in NP%S, with the October result of 1.3% being a 0.01 percentage point improvement on the prior month
• While declining compared to the prior month, SA&NT was the only state that had its October result remain above its YTD NP%S. The October and YTD NP%S result for the average dealer in the state was 2.5% and 2.3% respectively
• The average dealer in QLD saw NP%S at 1.6%, which was the largest drop (0.5 percentage points) amongst the states. Excluding its September result (which benefited from quarterly incentive payments), profitability for QLD continues to trend downward for the second half of the year
• NSW dealers were the least profitable on average for the month, with NP%S at 1.1%. Pressure continues to remain on the new vehicle department and October also saw a softer performance in F&I with the average dealer earning $340 less in new finance per contract compared to the YTD average for the state

Segments

• NP%S declined in each of the segments this month, with the luxury segment experiencing the largest drop of 0.5 percentage points to 1.3% this month
• The prestige and volume segments both dropped 0.2 percentage points this month leaving the prestige segment at 1.6% and the volume segment at 1.5%

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