Q4 2016 Dealer Profitability

Total Industry

The dealer profitability as measured by net profit as a percentage of sales (NP%S) for the last quarter of 2016 was recorded at 1.5% taking the yearly profitability for 2016 to 1.7% which was 0.5% down from 2015

State-by-State

New South Wales/Australian Capital Territory

The average NSW/ACT dealer NP%S was 1.9% for the period Oct – Dec 2016 which up by 0.5% for the same time in 2015. The YTD 2016 NP%S for this state group was at 2.0% which was 0.1% lower than 2015.

Queensland

For Q4 2016 the state of QLD recorded a NP%S of 1.5% and for the year of 2016 the NP%S was at 1.8% which is 1.2% lower than 2015. This drop in profitability can be attributed to higher departmental and fixed expenses.

South Australia/Northern Territory

The NP%S for SA/NT was recorded at 1.6% for the fourth quarter of 2016 and the YTD profitability was recorded at 2.1%. This was lower by 0.5% for the year 2015, this reduction in profitability could be attributed to higher departmental expenses than the fixed expenses.

Victoria/Tasmania

This state group saw the greatest increase in the sales revenue for Q4 2016, the total dealership sales revenue increased by 38%, the gross increased by 32%, but this state group also saw the steepest increase in fixed costs which increased by 36% thus putting pressure on profitability. As a result the NP%S for this state group was recorded at 0.9% for Q4 2016 and for the full year 2016 the NP%S was 1.1%.

Western Australia

Western Australia had a NP%S of 1.6% for Q4 2016 and a full year NP%S of 1.7%. This state has a net erosion of 10% in the total revenue for 2016 as compared to 2015, the state had a lower new vehicle sales but managed to sell more used vehicles than 2015. It also has cut the fixed expenses and was able to get a higher profitability than 2015.

Segments

For Q4 of 2016, the luxury segment had the lowest NP%S of 1.4% amongst all the segments tracked and for the full year it was 1.7%. This was a result of softening Q4 sales and a lower Q4 selling gross. The Prestige segment had a Q4 profitability of 1.6% and an overall profitability if 1.8% for 2016. The Volume segment also had a Q4 profitability of 1.6% and an overall profitability of 1.8% for the full year 2016.

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