Sales margins take hit
Turners Automotive Group says margins on car sales have dropped to levels seen about two years ago as market demand softens.
After starting the year with a record quarter for the business, activity at its stores nationwide has dropped since late March.
It says the US-Iran conflict has led to weaker activity but bosses remain optimistic that vehicle sales and margins will increase as the financial year progresses, as has happened in previous years.
Aaron Saunders, chief financial officer, told those attending the group’s results briefing on May 21 that margins through April and in the first couple of weeks of May were about $150 to $200 a unit lower than in the first three months of the year.
“We’re still seeing good growth in finance and stable performance in insurance, but the primary activity of our retail business has seen a noticeable drop off from March,” says Saunders, pictured.
“Volumes are down and margins are back at the levels they were in April to June 2024. There’s definitely been a hit to demand in the short term.
“This is a place we have been before. The economy went into recession in that winter period in 2024 and it feels a little bit like that again.”
Todd Hunter, group chief executive officer, notes the market is facing “pretty challenging circumstances” but the company’s diversified model has been resilient through previous cycles, “and I think we’re going to get the opportunity to prove that yet again”.
He also told the briefing a financial year should not be judged on six weeks alone, highlighting how improved trading conditions in the second half of the 2026 financial year led to a record net profit before tax.
“We are definitely going through a pricing transition at the moment, just like we did in 2024 and 2025, so you always see some downward pressure on margins as you go through that.
“Once demand sorts itself out, margins will start to build again [and] we’re certainly entering FY27 very well-positioned and well-funded for the next phase of growth.”
