Two-thirds of dealers worried about future margin erosion

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Two-thirds of automotive sellers (66%) are nervous about future margin erosion affecting their enterprise.

Startline’s July Used Automotive Tracker reveals the most important considerations are excessive values of used vehicles squeezing margins (talked about by 66%), value of electrification resembling putting in chargers (52%) and rising staffing prices (52%).

Different main worries embody growing difficulties surrounding compliance (36%) and the price of infrastructure together with showrooms (36%).

Paul Burgess, CEO at Startline Motor Finance, mentioned: “We’ve been seeing growing concern about margin erosion among the many used automotive supplier neighborhood in current months and this month’s Tracker reveals that it’s a real fear for very many.

“There may be merely quite a bit occurring within the sector in the mean time. There are lots of areas the place prices are rising, resembling staffing and infrastructure; the place funding is required, resembling electrification; and the place assets are being consumed, resembling compliance.

“Add to this the continued difficulties generated by inventory shortages and the ensuing excessive costs and values of autos, and it’s clear that income are being threatened from many instructions, whereas new alternatives are maybe at the moment tougher to determine.”

The analysis additionally signifies that 27% of sellers had been nervous about shedding gross sales from guarantee and different aftersales merchandise whereas solely 15% thought the brand new Client Responsibility rules would have an effect on their capacity to promote motor finance.

Burgess added: “Actually, we’re seeing efforts throughout our supplier base to extend motor finance presence with many viewing Client Responsibility as a technique to positively rethink their entire method to this space by means of higher matching of automotive purchaser to finance product.”

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