Pendragon boosted by strong aftersales and used car sales
STRONG aftersales and improving used car sales helped to boost Midland based car dealers Pendragon during the first three months of the year.
New car sales were up across its premium Stratstone and volume Evans Halshaw networks but due to increased cost prices margins were down.
The group’s performance is a strong barometer for the health of the economy and is an important indicator for the region’s automotive industry.
In its Aftersales operation, turnover declined marginally but was in line with expectations. Nevertheless, gross profit margin improved by 280 basis points.
Used car volumes continued to perform strongly, up 15.6% on a like for like basis, significantly outperforming a flat market according to the latest available market data.
It said used car margins had remained stable during the quarter.
Excluding scrappage, like for like UK new car sales for the key brands it represents were up 9.1%, compared with a market increase of 7.5%.
“Aftersales remains the primary source of gross profit for the group and continues to generate the highest profitability. The group is continuing to enhance this area of the business through our Vehicle Health Check programme and a number of other aftersales initiatives such as deployment of service packages and increasing MOT capacity,” said the group in its statement.
“We remain confident that used car margins will remain stable and used car volume will continue to grow during the remainder of the year. The performance from used cars is a result of the on-going used car initiatives, national coverage and scale, the choice from our wide product offering and the continued improvements in our internet proposition and brand recognition.
“The group’s UK new car volumes performed in line with the market and margins declined marginally as a result of higher priced vehicles predominantly within the Stratstone division, although profit per unit was maintained on the prior year levels.”
Pendragon said its Californian operation, where it sells Jaguar Land Rover and Aston Martin, had continued to outperform 2010 during the first quarter of 2011 and it expected this to continue during the remainder of the year.
In outlook, it said it expected the business improvement to continue.
