ASE, the dealer profitability specialists who compile detailed figures every months, reckons that June was a pretty good month for franchised dealers. In fact retailers averaged around £41000 profit for the month. This was slightly down on last year, but as a whole Q2 was substantially up on 2017. They have put this improvement down to used-car sales. And as if to back that up, we saw figures this week that show that used-car sales were up substantially in July, with PCPs playing an increasingly important role in the used-car mix. Over the past year they have risen by 27%.
Last week we reported on JLRs problems for the first half – well Volkswagen is suffering no such problems. In fact they posted record second-quarter results, though they have warned that the second half of the year could be particularly difficult with the spectre of Trumps Trade Wars looming on the horizon. It is interesting to see the effect that the President of the United States is having on the car market, because he has also proposed this week to weaken emission rules for carmakers. Intriguingly the Financial Times suggests that this could provoke an interesting debate between the federal government, who should now become a more liberal, and the California government who have some of the strictest regulations in the world.
And talking of strict regulations, I see Jato Dynamics have also suggested that WLTP roles could add to emission woes, as the real-life tests are showing that vehicles are emitting significantly more CO2 than they had expected. Up to 10 g per kilometre for larger vehicles. This will have a knock-on effect not only for car manufacturers, but also for consumers, for whom VED and a number of other taxes will be based on CO2 emissions.
Talking to dealers and manufacturers, one of the biggest issues over WLTP is the lack of homologation for current models under the new rules, and many dealers are sceptical that they will have any sort of plentiful supply before the end of this year. All of which should be good news for the used-car market, but continues to present a problem for new car registrations. Targets will remain high though, I bet.
Have a great weekend, it’s going to be warm again, but not as warm as Europe.
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