Car dealer Lookers reported positive trading today despite a fall in profit from new cars as the industry continues to reel from new regulations.
Lookers said gross profit from new cars was down five per cent year on year in the nine months to the end of September, citing a shortage in supply following strict new emissions tests. New car sales represent roughly a third of the company’s gross profit.
The fall in sales chimes with an industry-wide drop in new car sales of 2.9 per cent in October, according to the Society of Motor Manufacturers and Traders (SMMT), as the introduction of a new emissions test continues to cause a backlog in test houses.
However, the chain said gross profit from used cars increased 10 per cent in this period with improved margins per unit. Gross profit from after-sale services was also up six per cent.
Despite the mixed results, the company said it had produced a “positive financial performance” given tough market conditions, expecting full year results to be in line with expectations, though its £5.6m acquisition of Jennings means earnings for the full year will be flat.
Analysts Peel Hunt called the performance a "strong outcome". "While new car sales have been challenging, this has been largely offset by stronger margins,” it added.
“For 2019, Brexit uncertainty weighs more heavily on the auto sector, with a risk of price inflation and potential disruption.”