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Just read this article , not sure if everyone has see it by Glass's Guide -AM interesting Reading , but what do you think? By Dr Richard Parkin It’s a competitive world in the used car sector, but despite the more positive news that the industry is predicted to grow this year, many dealers are still too focused on used car margins and aren’t paying enough attention to stock turn. Richard Parkin, Glass's Dr Richard Parkin is director of valuations & analysis at Glass’s, where he coordinates the editorial and analysis team. Prior to joining Glass’s in 2012, he spent six years as a strategy consultant at Ernst & Young, with a focus on the automotive industry. To maximise profitability, dealers should be focused on the profit made per forecourt space each week rather than on the margin made on a vehicle. Glass’s studied a basket of vehicles over the course of 2013, monitoring the trade and retail prices in each month for a three-year-old/36,000-mile example, along with the average selling days. Astonishingly, the typical difference between trade and retail prices in any given month varied by as much as 25%, or about £500 for a typical B segment car. However, once the average time elapsed between trade purchase and retail sale was allowed for, the actual achieved gross margin showed a more consistent picture. Such findings reinforce our view that trade and retail guide prices need to be derived from independently moving sources of data, otherwise this true behaviour is not captured. Why used car margins do not give dealers the full picture The chart, below, shows the trend in both the actual achieved gross margin and the profit per forecourt space per week for typical B and D segment cars. Glass's stock turn graph Notably, despite a broadly flat gross margin, the financial return on the B segment car to the dealer appears to have declined by about 40% over the course of 2013, from a rate of over £500 to just under £300 per forecourt space per week for a Ford Fiesta Zetec petrol as a consequence of a steady lengthening in the time needed to secure a buyer for such a car, most likely caused by the plethora of great new car deals for private buyers in that segment. By contrast and despite greater volatility, a typical D segment vehicle did not show the same level of decline, with a gross margin potential for a Vauxhall Insignia Exclusiv remaining around £600-£700 per week throughout 2013. However, “hidden discounting†through retail PCP deals has been less aggressive in this segment. It appears that dealers are unaware that the level of profits from certain vehicle segments has been in decline, and many have not adapted. This really brings into question what a dealer should be stocking; however, it will be necessary to stay ahead of the game as once enough dealers make the connection, prices and selling days will become less attractive as retail supply increases and consumer demand shifts elsewhere. Without the right data and systems, there is a real chance that the less informed dealer will be left with only the weaker opportunities.