Traxio: ‘Belgian car dealer’s margin reduced to 1,61%’
While the Belgian car market is progressing, the Belgian association of the automotive sector, Traxio, announces in its 2017 report that the average margin of the automotive distribution sector is reducing from 1,75 to 1,61%. Explanation is to be found in a growing fleet of company cars with tight margins and higher labour costs.
Since 2013, the Belgian association for the automotive sector, Traxio, analyzes the financial health of the Belgian car distribution sector. For a total of 1.860 automotive companies, the association looked for five indicators: gross and net margins, net returns on equity, debt ratio and liquidity rate.
From 3,01% to 1,02% margin
Analyzing this data, Traxio concludes that while the Belgian car market sees itself in a rather positive economic situation, gross and net margins are going down to levels below those of 2015. For last year, the median margin was at 1,61% compared to 1,75% for 2016.
Highest margins are still to be found at Mercedes (3,01%), Volvo (2,43%), Mazda (2,33%), Audi (2,33%) and Renault (2,13%). The other brands show lower margins with Kia (2,10%), Citroën (2,0%), BMW (1,86%), VW (1,75%) and 1,71 for the VW Group, Peugeot (1,53%), Nissan (1,49%), Toyota (1,37%) and FCA Group (1,34%). The lowest margins are to be found at Jaguar-Land Rover (1,18%), Ford (1,03%) and Opel (1,02%).
Major growth in company cars
The Belgian car fleet increased by 1,2%, but that figure doesn’t show the whole picture. In the sales of new cars, the company car sector has experienced a major growth of 6% but dealers’ margins on those vehicles is quite tight.
While company car sales increased the number of registrations in Belgium, they weigh nevertheless on the profitability of the distributors whose turnover depends on it. Dealers are also affected by shortage of skilled staff. Employers have to raise wages if they want to keep their staff.