Dealers only make a little on car sales, I'm not having it!

[Rincewind209]

daemon said:

Thankyou4calling said:

Thanks for the self analysis, much appreciated.

Now, I don't know your role at Audi Northampton but if you made 0.7% profit V turnover, quite clearly that is poor. Well below industry norm.

Haven't seen your accounts, post them up and i'll make some comments and recommendations, I won't even charge for the advice mate.

And then people wonder why the motor traders generally don't bother posting anymore...

Published accounts do provide a reasonable indication of how much money is made.

[Sheepshanks]

HTP99 said:

My colleage has recently sold a number of Masters with a retail of £30k each, we made £200 on each one.

Yeah but....the price of the vehicle is pretty irrelevant - except that the higher it is the worse it makes the dealer margin look.

Which is why it's pointless the car sales folks bleating on about margins on turnover.

I used to work in a different field where we imported stuff and distributed it. On some large orders we'd do what we called "postbox" - customer would order from us, we'd order from supplier. Then customer would pay us, we'd ship the goods and we'd pay the supplier, less a handling charge.

I don't know the fine detail of how this was handled in our accounts but we couldn't show the full value as it would have completely screwed our overall margin %.

[oldnbold]

Thankyou4calling said:

VorsprungDirk said:

You really cant see any further than the end of your nose can you, I work at Audi, also in Northampton and we make 0.7% profit against turnover this year, if I was investing in a business it wouldnt be a car dealership.

Thanks for the self analysis, much appreciated.

Now, I don't know your role at Audi Northampton but if you made 0.7% profit V turnover, quite clearly that is poor. Well below industry norm.

Haven't seen your accounts, post them up and i'll make some comments and recommendations, I won't even charge for the advice mate.

Thankyou4calling why don't you post up what your position in the motor trade is that gives you such a clear and factual insight into the profitability of the motor trade.

You seem to know far more than any of us that work or have worked in the trade, including a chap who had daily visability of the P&L accounts for a large dealer group.

So please share the source of your knowledge with us all.

[Thankyou4calling]

oldnbold said:

Thankyou4calling why don't you post up what your position in the motor trade is that gives you such a clear and factual insight into the profitability of the motor trade.

You seem to know far more than any of us that work or have worked in the trade, including a chap who had daily visability of the P&L accounts for a large dealer group.

So please share the source of your knowledge with us all.

I don't work in the motor trade. My last post referred to accounts, these are just numbers, I don't see that it matters as to what they relate to.

I'm not trying to be clever at all but the guy who says he works at Audi northampton was stating some figures so I'd like to see them.

[Fast Bug]

Funnily enough I was at a presentation yesterday for our group's new car sales P&L. I wouldn't be sinking my coin in to a dealership that's for sure

[LaurasOtherHalf]

I've heard from people in the know that the 1% profit from turnover is about right for large main dealers (example was the local bmw).

Not bad when you're turning over 100M per annum.

[Sheepshanks]

Fast Bug said:

Funnily enough I was at a presentation yesterday for our group's new car sales P&L. I wouldn't be sinking my coin in to a dealership that's for sure

Which begs the obvious question that no-one here has answered.

LaurasOtherHalf said:

I've heard from people in the know that the 1% profit from turnover is about right for large main dealers (example was the local bmw).

Not bad when you're turning over 100M per annum.

It's absolutely terrible on the face of it.

But if, for example, that was £100M of new car sales, then take out the cost of the cars (they don't pay for them until the customer or finance people have paid and apparently they only make 5% so say £95M) and they're left with £5M on which they made £1M profit. That's not too shabby.

[Grandfondo]

Fast Bug said:

Funnily enough I was at a presentation yesterday for our group's new car sales P&L. I wouldn't be sinking my coin in to a dealership that's for sure

Up here in the Highlands Arnold Clark is swallowing up all the independats at an alarming rate!

[milner993]

Sheepshanks said:

TVR1 said:

Why should our margin be transparent?

Because dealers are at best misleading and at worst lying to customers in saying there's only a few % in new cars.

There ought to be a review of new car retail market pricing to make it more open. Perhaps people might trust car salesmen more then?

That really is laughable, I know let's have a review on all consumer goods just to make sure everyone get's a better deal and business all make less money for the services/goods they offer.
I'm that untrustworthy as a salesmen and I lie that much that a number of my customers are on there 5th 6th vehicle from me, you probably want their contact details just to verify I'm not misleading you!

[LaurasOtherHalf]

Sheepshanks said:

Fast Bug said:

Funnily enough I was at a presentation yesterday for our group's new car sales P&L. I wouldn't be sinking my coin in to a dealership that's for sure

Which begs the obvious question that no-one here has answered.

LaurasOtherHalf said:

I've heard from people in the know that the 1% profit from turnover is about right for large main dealers (example was the local bmw).

Not bad when you're turning over 100M per annum.

It's absolutely terrible on the face of it.

But if, for example, that was £100M of new car sales, then take out the cost of the cars (they don't pay for them until the customer or finance people have paid and apparently they only make 5% so say £95M) and they're left with £5M on which they made £1M profit. That's not too shabby.

Exactly, this was from someone with a lesser main dealership where the profit margin was more like 5%.

4 or 5 bmw main dealerships all turning a £1M profit is staggeringly good business when you consider most of these types of business are run by private individuals/families.

[oldnbold]

Thankyou4calling said:

I don't work in the motor trade. My last post referred to accounts, these are just numbers, I don't see that it matters as to what they relate to.

I'm not trying to be clever at all but the guy who says he works at Audi northampton was stating some figures so I'd like to see them.

I'm not sure if you've read it, but the post by ralphrj who was in a position at a large MB group that allowed him daily contact with the accounts and P&L for each dealer, it's very revealing. It's been posted twice, once on page 5 and again on page 16.

I think it shows that the business as a whole clearly makes a profit, after all little point in opening the doors if you didn't. However I think the point of this thread is about the public's perception of how much profit the sale of an individual car makes a dealer.

All of the salesmen on here will have experienced the chap who comes in to buy a £12k car, expects near retail money for his PX and then wants £1k or more off the sticker price. When it's explained that's not possible he gets the hump and comes on an internet forum moaning that the slimey no good salesman was trying to rip him off so he told them to stuff it.

What the contributers from the trade have been trying explain for 17 pages now, is that for volume new cars there is little profit for the dealer fom the initial sale, they depend on target achievement to collect the bonus pot, although many also give away this expected bonus money as discount just to sell the car in the first place. There can be a good profit in used sometimes, and more can be made from finance, GAP, etc.

You can argue that the way that dealers operate is not good practise from a business point of view, but this is largely dictated by the manafacturer, even down to buying the super expensive desks and chairs in the showroom that have to be purchased from them. The penalties for not following the manafactures standards are quite severe.

Your obviously an accounts expert judging by your posts, so do the large dealer groups actually make any more profit than comparable sized companies in other industries?

[berlintaxi]

daemon said:

And then people wonder why the motor traders generally don't bother posting anymore...

Apart from you, does anybody really give a toss whether the motor trade post or not? Or is that we are all meant to be in awe at their musings?

[valiant]

berlintaxi said:

daemon said:

And then people wonder why the motor traders generally don't bother posting anymore...

Apart from you, does anybody really give a toss whether the motor trade post or not? Or is that we are all meant to be in awe at their musings?

To be honest, I miss that thread and I feel that those in the motor trade give us an insight into how things work and why things are done the way they are.

Considering that this is a motoring forum, it seems strange that many seem to object to car salesmen telling us how it is without resorting to pettiness.

Certainly when I bought my last car I approached the deal in a slightly different way to what I thought was the norm due to what was said in that thread and I came away with a decent deal and a much more pleasurable, less stressful experience to what I've previously experienced.

I'm certainly 'not in awe' of any salesman, but I appreciated the insight from the other side of the desk and enjoyed reading about the day to day stuff and various customers ludicrous expectations.

Pity a bunch of tts spoiled it for all the rest. Spot a pattern?

[berlintaxi]

Nice to see you resort to petty insults if someone has a different opinion to you, classy.

[oldnbold]

berlintaxi said:

Nice to see you resort to petty insults if someone has a different opinion to you, classy.

Your previous post about the PH members who are in the motor trade was designed as a compliment then was it?

[andymc]

berlintaxi said:

daemon said:

And then people wonder why the motor traders generally don't bother posting anymore...

Apart from you, does anybody really give a toss whether the motor trade post or not? Or is that we are all meant to be in awe at their musings?

in awe

[missing the VR6]

berlintaxi said:

Nice to see you resort to petty insults if someone has a different opinion to you, classy.

Why do you have such a hardon for car salesmen? Did your wife cheat on you with one?

[daemon]

Rincewind209 said:

daemon said:

Thankyou4calling said:

Thanks for the self analysis, much appreciated.

Now, I don't know your role at Audi Northampton but if you made 0.7% profit V turnover, quite clearly that is poor. Well below industry norm.

Haven't seen your accounts, post them up and i'll make some comments and recommendations, I won't even charge for the advice mate.

And then people wonder why the motor traders generally don't bother posting anymore...

Published accounts do provide a reasonable indication of how much money is made.

Unlikely that someone is going to post them up though isnt it?

[daemon]

berlintaxi said:

daemon said:

And then people wonder why the motor traders generally don't bother posting anymore...

Apart from you, does anybody really give a toss whether the motor trade post or not? Or is that we are all meant to be in awe at their musings?

As has already been said - there are active motor traders on here who could give an insight into the workings of the motor trade, and given this is a motoring forum many seem to find it useful when they do.

Frankly, a lot of them dont bother now because of attitudes from a small minority such as you.

I personally think that is a loss for the forum as a whole, just so one or two can get on like pricks.

Nobody has to be "in awe" of anybody by the way. Just try not to be a .

Edited by daemon on Friday 12th December 16:42

[daemon]

berlintaxi said:

Nice to see you resort to petty insults if someone has a different opinion to you, classy.

Ah right, like you did about me several pages back?

Maybe if you cant take it, dont dish it out.