Motor Trader magazine’s Top 50 report for 2015 has collated the 2014 year-end figures from the 50 largest non-franchised car dealers in the UK, using the services of Trend Tracker, the independent automotive research company. Happily, the figures make encouraging reading for independents throughout the country. The magazine’s 16th annual survey, the most comprehensive in its field and part of the magazine’s output since its establishment in 1998, has recorded significant growth in turnover and profitability for the 50 largest retailers compared to 2013 (itself one of the most successful years since the 2008 recession and its aftermath).
Substantial progress in revenue and profits
The report shows combined turnover for the top 50 non-franchised dealers during 2014 rose by 15% to £2.9bn. Combined pre-tax profits were even more impressive, climbing by a huge 58.5% from the 2013 figure to 100.5m – this was largely due to an increase in the gross profit margin for each used car sold.
Annual used car sales rose 1.18% to 6.89 million vehicles, 4.1 million (78.3%) of which were sold by dealers. This means that 2.9 second-hand vehicles were sold for every new model during 2014, a signal that used car retailers remain successful despite the proliferation of low-interest finance deals on many new cars at manufacturer-backed franchised dealers.
10 out of 11 UK regions showed an increase in used car sales – particularly Greater London, the North West and Scotland, all of which saw growth in excess of 2%. The exception to the upward trend was East Anglia, which suffered a 5.24% decline; possible reasons for this could be the relatively high cost of repairs in the region and the preference of East of England drivers for low-mileage vehicles, both of which could play a part in customers choosing new rather than second-hand cars (especially in the context of the aforementioned financing deals at franchised retailers).
Who’s top, who’s in, who’s out
The top spot on the Motor Trader 50 was taken by Motorpoint, which saw turnover rise to £55.1bn and total sales reach 41,376 units across its eight outlets. This was enough to wrest first place back from Car Giant, whose vast used car hypermarket in London’s White City managed an annual turnover of £46.6bn and 55,100 sales. Available Car, Car Shops and The Car People filled the third, fourth and fifth positions.
The six newcomers to the Top 50 list – Red Line Specialist Cars, SSC Specialist Cars, Sascron, Rix Motor Company, Quirks Car Company, and Automatic Cars Limited – all achieved annual turnover of at least £8m (a higher figure than the minimum of £7.6m required for Top 50 status last year). As befits its status as one of Northern England’s largest non-franchised retailers of pre-owned prestige vehicles, Red Line Specialist Cars made a particularly impressive debut, coming in at 18th position with a turnover of almost £3.7bn. This success was made still more dramatic from a business with a single location in North Yorkshire and just 19 employees (meaning £1,920,639 of revenue for each member of staff). This extraordinary sales-per-employee figure was exceeded only by DK Engineering (£2,842,716) and Romans International (£3,313,561), two other retailers of prestige and high-performance used cars, who came 7th and 14th respectively in the Top 50 with workforces of under 30 people
The conclusion: a bumper year with further cause for optimism
Although mainly a year of stability and growth, one major used car business was missing from this year’s list. Carcraft, which had been 5th in the survey as recently as 2013, was wound up in April 2015 with the immediate loss of 500 jobs across its 11 locations after a failed management buyout. The total workforce of the biggest 50 independent dealers, however, rose slightly from 4,500 in 2013 to 4,793 by the end of last year – in a year when the Top 50’s total number of retail outlets fell from 103 to 95 (largely due to the aforementioned demise of Carcraft).
“By and large, growth in the sector has been organic, and merger and acquisition activity a rarity”, noted the report’s authors, Toby Proctor and Chris Oakham of Trend Trackers. They hailed the excellent performance of the major independent retailers, who have “built on the growth they achieved in 2013 with significant increases in turnover and profitability”.
They also observed that market conditions are established for another excellent year, due to “the force-feeding of the new car market [which] ensures that low- to mid-range cars from volume manufacturers continue to depreciate in value at a rate which makes them a compelling proposition for many in the market for one- to three-year used cars”. These ongoing trends in the used car market means that used car dealers can be optimistic about their prospects for growth next year.
To see the full list of Top 50 Independent Dealers click here