8 in 10 expect it to have an adverse impact.

More than three in four British car dealers expect 2017 profits to either fall or, at best, remain flat – a significant decline in optimism that's being blamed on Brexit. This time last year, before the results of the EU Referendum were known, only around half of dealers expected anything other than an increase in profitability.

The MHA Motor Dealer report says almost eight in 10 dealers feel Brexit is going to adversely impact the UK automotive industry, and any growth is going to come from growing and redeveloping their existing businesses rather than setting out to acquire more car dealers themselves. 

Increasingly, it's expected to be the used car divisions of UK car dealers that deliver profits in 2017, not the new car side. This is partly because car dealers are reporting pressure from manufacturers around pre-registrations, with high levels adversely affecting dealer profitability. In contrast, used cars could be well placed to capitalise on car buyers seeking greater value for money.

Diesel scrappage schemes, Financial Conduct Authority attention on Personal Contract Purchase (PCP) mis-selling and a lack of consumer confidence resulting in lower private new car registrations are other worries concerning the UK motor trade. 

Head of the MHA Motor sector Steve Freeman said he was not surprised to see dealer confidence is declining. "The industry is really going through a period of change and I do think that online developments may start moving at a pace now. 

"The continued strength and resilience of the sector is certainly dependent on all parties (including manufacturers and their franchise partners) working together to ensure a sustainable business model for the future."

Source: The MHA

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