Lookers mindful of cost-of-living crisis on car buyers as inflation falls in March

Lookers boss Mark Raban says the listed dealer group is mindful of the impact the cost-of-living crisis is having on car buyers – and his business.

Raban said the dealer group – which represents 35 car manufacturers across 147 sites – has been taking action to counter rising costs itself.

In 2022, Lookers’ underlying operating costs increased by some 10.1 per cent, which led to Raban being forced to intervene.

He said: ‘As a business of considerable scale and a significant employer, we are experiencing material cost pressures.

‘Our utility and energy costs have risen sharply, and our inventory financing costs have increased as interest rates have increased.

‘We continue to work hard to offset these headwinds – during 2022 we introduced the “Lookers Big Switch Off” campaign, which proved very successful at reducing our energy consumption across our sites, as well as contributing towards our environmental targets.’

Raban said Lookers was doing all it could to ensure the cost-of-living impact on consumers was cushioned as interest in buying cars wanes.

It comes as the Office for National Statistics (ONS) revealed this morning that the Consumer Prices Index (CPI) inflation level fell to 10.1 per cent in March from 10.4 per cent in February.

The fall was less than expected, with forecasts from economists predicting it would drop to 9.8 per cent.

Fuel and energy prices fell in March, but food is still climbing, with bread and cereal prices at record highs.

Raban said: ‘The current cost-of-living crisis poses a number of significant challenges for Lookers.

‘With double-digit inflation, rising interest rates and geopolitical uncertainty, consumer disposable income and confidence has naturally reduced.

‘Despite the fact that for many consumers their vehicle is a necessity, we are fully cognisant of the pressures being faced and are doing all we can to combat this by ensuring our vehicles and ancillary products are competitively priced.

‘We have also introduced additional flexible payment options to spread the cost of essential repairs, maintenance and servicing where customers wish to.’

Earlier this month, the dealer group reported its annual results for 2022, which saw its underlying pre-tax profit sink by eight per cent last year to just under £83m on increased revenue.

In its results for the year to December 31, 2022, Lookers revealed an £82.7m underlying pre-tax profit versus £90.1m in 2021. The group turned over £4.3bn, which was up from £4.051bn in 2021.

Looking ahead, Raban says the opportunities electric vehicles offer the dealer group are ‘exciting’.

He said: ‘The continued adoption of electric vehicles represents a significant and exciting opportunity for Lookers over the next few years and we are well positioned, both through our new and used sales capabilities and the way we are evolving our aftersales services, to meet the needs of these vehicles.’

Lookers revealed plans to be a major player in the used EV market at the start of the month, with plans for a £5.6m CarHub used EV ‘destination centre’.

Speaking to Car Dealer, chief operating officer Duncan McPhee said the Car Dealer Top 100 company was looking to build the standalone multi-franchise site in Middlesbrough this year.

Writing in the group’s annual report, published this week, Raban added: ‘At Lookers, our aim is to be at the forefront of the electric vehicle revolution and already approximately 19.8 per cent of all of our new cars sold were battery electric vehicles.

‘We are also delighted to represent a number of newer, electric-only brand partners.

‘The continued adoption of electric vehicles represents a significant and exciting opportunity for Lookers over the next few years and we are well positioned, both through our new and used sales capabilities and the way we are evolving our aftersales services, to meet the needs of these vehicles.’

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