Car sales soar at dealership Inchcape but microchip shortage a concern
The company said sales have exceeded expectations and the chip shortage is only having a ‘limited’ impact so far.
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Your support makes all the difference.Car dealership Inchcape said it has seen a surge in business ahead of expectations as lockdown restrictions ease.
But bosses said uncertainty remains as the pandemic recedes and also warned of a global shortage of microchips used in vehicle electronics.
The company said the impact of the chip shortage currently remains “limited” and said strong sales mean full year pre-tax profits will be significantly ahead of analyst predictions of £216 million.
Pre-pandemic pre-tax profits for the company were £326 million and the profit upgrade is expected to come in below that figure.
But investors were pleased with the news, with shares jumping 3.5% by lunchtime on Friday.
Inchcape has 93 UK dealerships selling used and new cars, including Audi BMW and Mercedes-Benz vehicles and trades in 36 markets globally.
It saw a sharp fall in sales when the pandemic first hit as households were forced to stay indoors.
The decline led to manufacturers pulling back on supplies and orders for microchips, leading to other tech industries loading up.
Car production has ramped up again as demand starts to grow but chip manufacturers have been unable to keep up, causing a global shortage.
Mercedes were forced to pause production and Mini had to close its Oxford plant for a short period.
Jaguar Land Rover also had to stop production for a time at its own plants.
Manufacturers have also suffered from global shipping delays as demand increases and some have reported Brexit-related problems as companies get to grips with new paperwork and rules.