April 2023 – Data from Dealer Auction’s latest Retail Margin Monitor has revealed that Lexus offered dealers the best opportunity for profit in March 2023. New make and model entries in the top ten remind dealers of the importance of being agile in their stock-buying strategies.
The premium marque clocked an average retail margin of £3,350, followed by Subaru at £3,100 and Land Rover at £3,000. This represents the most significant shift in the top three makes since the launch of the Retail Margin Monitor, which has been historically dominated by Land Rover, Jaguar and Jeep. This shift could indicate that savvy dealers are starting to seek out new profit opportunities; it also points towards Subaru’s current supply issues.
Moreover, while the usual premium marques still occupy significant space, MG and DS Automobiles’ reappearance in the top 10 – each for only the third time – demonstrates just how important it is for dealers to stock a range of vehicles for all consumer needs.
Dealer Auction’s Marketplace Director, Kieran TeeBoon, commented: “Historically, Land Rover has ruled the roost, only once before being knocked off the top spot by JLR stablemate, Jaguar. So Lexus and Subaru taking the top two spots is very interesting. Though it’s worth noting that Subaru’s well-documented supply issues could be playing a part in driving prices up, and the heavy snow fall at the start of the month may well have contributed as the marque is a popular affordable all-weather car.
“While the persisting presence of luxury cars in the table cannot be ignored, the performance of MG and DS Automobiles shows that by tapping into different revenue streams, dealers can outpace the market – and cash in!”
Looking at the data at a model level, there were more surprises, with two people carriers – the Citroën Grand C4 Picasso and Ford S-Max – entering the top 10 in spots 9 and 10, respectively. This suggests that dealers are getting ahead of the game by locating practical, family-friendly vehicles for the summer.
As with previous months, SUVs – Land Rover models in particular – remain prevalent. Popular Land Rover products – the Discovery 4, Discovery Sport and Range Rover Evoque – were first (£3,600), second (£3,400) and fourth (£3,100), respectively. The Volvo XC90 took third place, with an average retail margin of £3,300.
TeeBoon concluded: “Amid the current suppressed supply of used cars, dealers shouldn’t be compromising on their stock-buying strategies. Acting on the available data insights will give them the confidence to leverage profit opportunities from both the consistently high-ranking products and the seasonally popular models, such as the S-Max and Grand C4 Picasso – providing unique opportunities for profit.”
Richard Walker, Director of Insights at Auto Trader added: “Given the stream of negative newspaper headlines, for many people the outlook for 2023 didn’t look promising. But against a backdrop of political and economic uncertainty, used car prices, and the market more broadly, have gone from strength-to-strength in Q1 and the profitability of the models highlighted in the Retail Margin Monitor confirms this.
Despite the strength of the used car market however, retailers missed out on nearly £25.5 million in potential profit in March by pricing their stock below their true market value with each retailer leaving an average of £3,300 in potential profits on the table as a result.”
About Dealer Auction
Dealer Auction is the UK’s smartest and busiest automotive digital wholesale marketplace. We give buyers and sellers more choice, better insight and greater margins. Dealer Auction is an independent company, created through a joint venture between Cox Automotive and Auto Trader. For more information, visit www.dealerauction.co.uk.
Launched in January 2022, Dealer Auction’s Retail Margin Monitor tracks the potential retail margin that can be achieved on vehicles sold on Dealer Auction’s open network. We track models meeting two key criteria: more than ten units sold with a retail price of less than £25,000. We then compare the sold price for each model with the Auto Trader market average to reveal the potential margin. We crunch the numbers at the start of every new month. This April 2023 edition analyses data from 1st March to 31st March 2023.
