Spanish Car Dealers’ Profits Keep Trending Upward

MADRID ─ Spanish auto dealers’ profits increased more than tenfold in 2014 to 1.03% from 0.09% in the prior year, according to a survey by Snap-On Business Solutions for GANVAM, the country’s leading association of auto dealers, vendors and repairers.

The association credits the improvement to dealers’ restructuring efforts and the government’s ongoing scrappage program providing subsidies for new-vehicle purchases while retiring less-efficient vehicles.

The scrappage scheme has been extended six times since the fall of 2012, when six of 10 dealers were losing money, and has helped spur eight consecutive quarters of growth, according to GANVAM.

The Snap-On survey reports sales of new and used vehicles generated 48% of dealer profits in 2014, up from 42% the previous year. Profits from aftermarket activity, including parts sales and service and repairs, fell from 58% to 52%.

Parts sales alone accounted for 38% of dealer margins last year, while service and repairs contributed 14%. Those activities contributed 43% and 15%, respectively, of 2013 profits. GANVAM attributes the decline to competition from unauthorized workshops that perform what it estimates are one out of every four repairs in Spain, although some analysts note the new cars being sold in greater numbers come with extended warranties and longer maintenance intervals.