A consumer in a car at a dealership

Dealers expect used car profits to rise in 2017

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Dealers expect profitability on new cars to decline in 2017 but to rise on used vehicles, according to a survey by cap hpi.

The automotive data experts found that over two thirds (69%) of dealers anticipate a drop in new car profitability, while 61% expect an increase in profitability on used vehicles.

Customer receiving car keysThe December dealer survey also found that dealers experienced their highest decline in consumer demand for the whole of 2016 in the last month of the year, with 61% saying demand had worsened, compared with 50% at the same time in 2015. Meanwhile 17% of dealers reported an improvement in demand, down slightly from 19% in December 2015. Another 22% saw little or no change, compared with 31% a year ago.

A majority of 70% experienced a decline in footfall but there was a rise in the number of dealers reporting an upturn, with 18% reporting more customers visiting the forecourts compared with 15% in November.

Online activity was down for 44% of dealers, but that's an improvement from the 59% who said the same in November. A fifth (20%) saw an increase in online interest, and the remaining 37% reported little or no change in activity.

Around two thirds (64%) of dealers reported no change in finance penetration in December.

Philip Nothard, consumer and retail specialist at cap hpi, said: "Overall, the last of this year's dealer survey results generally support the sentiment and feedback from across the network, along with PCP penetration and profitability expectations for 2017. As we've seen throughout 2016, the focus on boosting revenue through after sales will be even more important throughout the year ahead, as 92% believe reliance on this will be more significant or the same."

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