Blog Where does the automotive sector go next? - Plimsoll Publishing UK

With so many factors impacting on the fortunes of the UK automotive sector, new research from global market analysts Plimsoll Publishing Ltd suggests 100 of the UK’s largest automotive companies face the challenge of improving profitability.

As Brexit uncertainty continues to loom large, a new report from Plimsoll into the financial health of the UK’ 100 largest automotive companies shows that while, on average, each company is improving sales by just over 11%, these companies are reporting a pre-tax profit margin of just 1.6%.

As margins become squeezed and companies battle for market share, further results from Plimsoll indicate the challenges facing businesses in the UK automotive industry:

Analysis of the UK’s largest 100 automotive companies

• The average pre-tax profit margin is 1.6% - this is down from 1.8% in the previous year
• 17 businesses have seen their total sales decline in their latest year of accounts
• For 25 companies, profits have fallen in the last 12 months and 9 of these have seen a profit decline for the second consecutive year
• 10 companies reported a loss in their latest financial accounts
• On average each company is improving sales by 11.2%
• 33 firms are showing serious financial weakness and have been given the financial health rating of danger.

Plimsoll’s latest research has scrutinised the financial performance of 12,170 automotive companies across a multitude of industries ranging from Car Manufacturers to Tyre Dealers. As such, this new study has picked out the largest 100 companies and results show many of the UK’s top automotive companies are facing the tactical predicament about how to combine sales growth and profitability.

David Pattison, Plimsoll's senior analyst, said: “On the face of it, the industry is going through a period of prosperity and great development. However, the cost of this growth appears to be impacting on the bottom line. Business leaders for each of the top 100 companies face the challenge to maintain the growth but on a margin that’s sustainable.”

Despite the profit margins being relatively low, results within the automotive sector indicate some industries are experiencing growth.  The 10 fastest growing areas in the automotive industry include:

As well as the Top 100 Analysis, Plimsoll produces industry reports on 65 industries contained within the Automotive sector – more information can be found here.

Copies of the Top 100 analysis or the individual industry reports are available for just £350+vat. For ordering details please contact Chris Glancey on chrisg@plimsoll.co.uk