Average overhead absorption has fallen to 55.5% in the UK, according to new data from REALtime Communications.
Car dealerships will “not be viable at a 100% BEV mix” unless significant action is taken to change their business model, a new report has concluded.
With costs soaring, a constricted new car market and a used car market under pressure, the concern that routine vehicle servicing, maintenance and repairs (SMR) could be delayed, or cheaper alternatives sought by cash-strapped customers, is all too real.
A free Automotive Management (AM) webinar is set to offer insight into the issue of service retention in a car retail sector driving to overcome the challenges posed by COVID-19.
Original Equipment Manufacturers (OEMs), their National Sales Companies and franchised car retailer networks need to upweight plans to stop the erosion of overhead absorption across the franchised sector, if the viability of their operations is to be improved and customer confidence maintained.
Franchised dealers need to recruit more technicians, target increased retail work and address poor workshop utilisation to buck the trend of “an institutionalised acceptance of low overhead absorption”.
Car retailers were unable to take advantage of a milder February on their forecourts as profitability statistics published by ASE showed a £19,600 loss during the month – matching 2018’s performance.
AM spoke to industry experts to find out if some of the motor retail industry’s long-held beliefs still apply today.
The average UK motor retailer made an average of £73,200 during the plate change month of September, according to the latest ASE figures.
