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Macquarie’s top picks among ASX-listed car dealers

Macquarie's top picks among ASX-listed car dealers

Macquarie said in a research note that as supply chain issues are gradually resolved in the 2022 calendar, “auto dealerships will maintain higher margins if their order banks are cleared”.

They also expect sales volumes to accelerate as new orders are fulfilled and more people enter the market as it becomes clear that wait times are beginning to decrease.

‘Runout sales’ largely missing

But the “bumping” fiscal year-end sales, which are a fixture in the auto industry, will be largely absent this year due to long delays in vehicle supplies. Macquarie said it expects “less seasonal strength in June due to reduced floor inventory” for fiscal year-end sales.

Eagers Automotive’s largest shareholder is Rich Lister Nick Politis, who owns a 27 percent stake. He is also chairman of the Sydney Roosters in the National Rugby League competition.

Macquarie said the used car market remained tight with higher prices. It said used car prices have risen quarterly since June 2020, driven by a combination of production and supply constraints in the new vehicle market and underlying demand during the pandemic, as more people abandoned public transportation and used another vehicle. wanted in the household.

Macquarie said second-hand market prices were up 23 percent from June 30 last year to May 2.

Since June 2020, the prices of used SUVs are up 25 percent, passenger cars are up 43 percent, and light commercial vehicles such as vans and small trucks are up 5 percent.

The Federal Chamber of Automotive Industries said on May 4 that April new car sales in Australia fell 12.2 percent to 81,065 compared to a year ago, with car dealers unable to find enough inventory to meet demand. comply.

Macquarie said luxury brands such as Audi, BMW and Mercedes seemed to have more supply restrictions than mainstream brands.

Julian Russell, the chief executive of ASX-listed car leasing group Eclipx, said last week that he expected used car prices to remain 30 percent higher than before the pandemic through early 2023. shows no signs of improvement.

Eclipx operates brands such as FleetPlus, FleetPartners and FleetChoice, and has 93,000 vehicles on its books through fleet management agreements and renewed leases. It reported a 57 percent increase in net profit for the six months ended March 31.