Profits for UK car dealers more than sevenfold in 2021 following a surge in post-Covid demand.
According to data from accounting group UHY Hacker Young, profits rose by 627% from £105m in 2019/20 to £764m a year later.
After the end of the lockdown, new car sales increased as 141,583 new vehicles were sold in April 2021, 32% more than in 2020.
Car dealers, UHY Hacker Young reported, also benefited from a rise in the price of used cars as car production fell due to Covid-induced supply chain issues and shortages of raw materials.
“The increase in profits was much needed after the damage the pandemic has done to the industry,” said UHY automotive partner Ian McMahon.
“Some dealer groups would not have survived without government assistance in 2020, but in 2021 they had a boom year in sales and an increase in the value of used inventory.”
Looking ahead, auto dealerships are likely to take a few hits as auto production continues to fall due to global pressures.
Data from the Society of Motor Manufacturers and Traders (SMMT) indicated that UK production fell 11.3% in April, with just 60,554 new vehicles produced, City AM reported.
The decline in car production is also expected to impact the used car market, reducing dealer profits.
“The lack of new cars will impact the amount of used cars available for retail sale,” Edison Group research director Neil Shah said while commenting on the AutoTrader results.