Welcome to the 2014 Moore Stephens Automotive Key Performance Indicators for Automotive Retailers – Non Luxury and Luxury Editions

The Australian new car market has continued its upward sales trend with official sales figures for the calendar year 2013, showing sales up 2.2 % to 1.138 million units, surpassing the 2012 sales record of 1.112 million units.

The market performance was supported largely by:

  • Franchisor incentives via interest rate campaigns and value added extras
  • Car affordability at its best level in decades
  • Relatively low interest rates and strong employment
  • Increased consumer sentiment

Within this environment we have seen a marginal increase in average dealer profitability. Overall, there have been consistent results within new and used car profitability. The continuation of franchisor low interest incentives, access to disposable income and an increase in car affordability has kept sales volume levels at an all-time high. The trend towards SUV's is continuing with the segment showing the greatest growth while the demand for small passenger vehicles remains strong.

After-sales operations have remained static, with parts and service profitability in line with prior year results. Finance and Insurance revenue has improved as there continues to be a focus on increasing finance penetration and income per contract. Maximising service and aftermarket opportunities using effective CRM solutions will be critical for dealership profitability in the future.

The major costs pressures are in rent, facility developments and general overheads. With an increase in online sales activity, automotive retailers should consider where future investment is required and whether physical facility investment is as important as it has been in the past.

In 2014, we expect profit margins to be stable rather than increasing with a high level of reliance on franchisor incentives. The finance and insurance business is also expected to be of greater importance to overall dealership profitability. Another key success factor will be the provision of superior after-sales service to take advantage of increased unit sales.

At Moore Stephens Automotive we expect 2014 vehicles sales to be stable at 1.1 million sales.

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2014 Moore Stephens Automotive Key Performance Indicators for Automotive Retailers

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