Which Automotive Brands Are The Most Profitable?
1 December 2016 - Carbuzz
Automotive manufacturers typically publish their profits for the year, but those figures don't always tell the story of how the individual dealerships are doing.
Alan Haig, president of Haig Partners in Fort Lauderdale says that his company has calculated individual dealership performance. "This visibility into earnings will give owners, buyers and sellers insight into what they should be doing," Haig said. "It can also spark conversation between dealers and automakers on ways to improve," he said in an interview with Automotive News.
Haig gave the example of "If you're a Nissan dealer and the factory is critical of your performance, you don't really know how your store is performing compared to other dealers." He said that "They can now look at this and say, Nissan, your business model is netting dealers about $1 million a year, but Toyota and Honda dealers are netting $2.5 to $2.1 million." Looking at Haig's figures, Toyota and Honda dealerships are growing, while Acura, Audi, Infiniti and Lexus are all seeing double-digit profit declines. Out of all of the dealerships in the study, Nissan and Acura dealerships are suffering the biggest declines.
We have been begging Acura to improve on its current lineup, especially with its current flagship RLX model. Jaguar-Land Rover had the highest profit per franchise at $3.3 million. Haig said this is because JLR is a niche brand that can "make more profits off each car and their expense structure is lower, they can net more profit." Year-to-year profits for luxury brands as a whole were still down because of a consumer shift to trucks and high inventory problems which result in discounts. Low-volume, low-cost models like Mazda and Kia seem to be failing because "Sales per location are not high, and profit per car is not high." This data is the first of its kind, and will now be published regularly by Haig Partners.