Vertu Motors warns on profit as UK’s new car market hits the brakes
Car dealership Vertu Motors has warned of a hit to its half-year profit as pressure on household budgets slams the brakes on demand for new cars and electric vehicles (EV).
The firm reported a 5.8 per cent dip in new car sales over the five months to July 31. Used car sales came in moderately higher, up five per cent and contributing to a 3.3 per cent rise in like-for-like revenue.
Chief executive Robert Forrester said he was “pleased” with the group’s performance against a “fast-shifting market backdrop”.
“Our high margin resilient aftersales business continues to thrive aided by higher technician numbers and strong execution of the group’s vehicle health check process.”
The results fall against a backdrop of slowing car production in the UK.
The latest forecast from the Society of Motor Manufacturers and Traders (SMMT) expects a total new vehicle market of 1.97m units this year.
Such a figure would mark a 3.4 per cent improvement on 2023 but would be almost 15 per cent down on 2019.
Private EV sales have also suffered this year as consumers fret over the expense of switching from traditional petrol models.
Forrester warned: “The retail new car market remains weaker as the government’s regulation to transition to battery electric vehicles causes market volatility and negative impacts.”
Russ Mould, investment director at AJ Bell, said the environment for British car dealerships remains “tough,” although he noted resilience in the used market.
Vertu Motors has also sought to grow its aftersales business, which offers high margins and greater visibility for customers. “This is a sensible strategy but, in seeking to preserve profitability in this part of the business, Vertu has to be careful it is not perceived as ripping people off,” Mould added.