Shares in the second-largest car dealership group on the ASX crashed to a record low as it warned of a margin squeeze amid cost-of-living pressures.
Already a subscriber?Peter Warren Automotive, the second-largest car dealership group on the ASX, has warned that full-year profit could be 20 per cent below what investors were expecting as margins declineShares in the company, which operates from 80 locations in the eastern states selling 30 brands including Toyota, Mercedes-Benz, Volkswagen and Mazda, tumbled 11 per cent in early trading to $1.90. That marks the lowest point since it floated in April 2021.
Rival car dealers are offering more discounts to entice the shrinking pool of customers, and that extra competition is denting margins at a time when supply backlogs stemming from the COVID-19 pandemic are rapidly diminishing. Higher interest costs are also a restraint on profits.Eagers Automotive Peter Warren chief financial officer Victor Cuthell said the auto dealer was seeing a lower order take, but it was not a rapid slide.Mr Cuthell said the slowdown was across traditional petrol and diesel-powered vehicles and electric vehicles.
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