Agency to hit Inchcape UK annual revenues by £200m but no impact on profits

The introduction of agency in the UK will cut revenues at Inchcape’s UK business by about 10% or £200m a year but the impact on operating will be ‘negligible”. That’s the view of the group as it set out in its annual results.

“From the start of 2023, in the UK certain manufacturers will change the way they sell new vehicles, choosing to sell directly to consumers via dealer groups, and as such Inchcape will only recognise a handling-fee, not the selling price of the vehicle.

“The estimated impact of this change on Inchcape’s reported retail revenue is a c.£200m reduction. The impact on operating profit is expected to be negligible,” it said.

Inchcape continues to push hard into distribution with the purchase Derco in the Americas while it is also rolled out its bravoauto used car model, which it first trialed in the UK.

The digital-first multi-brand used car platform  is now live in nine markets. The group is on track to double used volumes by 2026 as set out in November 2021

The company is setting up a Digital Parts Platform, which it will launch in 2023 following a pilot in Australia last year.

It said the introduction of agency by some carmakers in the UK would dent revenues by £200m but the hit on operating profits would be ‘negligible”.