Australia’s largest automotive retailer says the outlook for car sales is encouraging, especially since proposed changes to the fringe benefits tax (FBT) were dumped.
Automotive Holdings Group (AHG) operates more than 150 car and truck dealerships across the country.
“AHG’s outlook for the automotive retail segment is robust heading into FY2014 (the 2013/14 financial year) on the back of low interest rates, manufacturer support, continual advancements in the quality and safety of new vehicles and overall vehicle affordability levels,” AHG said in its annual financial report released on Friday.
“The recently proposed changes to the treatment of FBT on vehicles has had an impact on the industry, however the September federal election outcome saw the proposed change repudiated.”
The former Labor government had planned to tighten FBT guidelines on car leasing and salary-sacrifice packaging.
The coalition government has dumped the previous government’s FBT changes, which were criticised by the auto sector because of their potential to affect consumer demand.
AHG said new vehicle sales remained at record levels up to August 2013, buoyed by manufacturer incentives of low interest rates and service offerings.
Acquisitions and new business opportunities are expected to generate growth for AHG into the 2013/14 year, it said.
AHG also has a logistics business that includes road freight, motor parts, vehicle storage and truck body building.
The logistics operations were well placed to grow organically, the company said.
AHG’s profit in 2012/13 rose by 32 per cent to $66.8 million.
Managing director Bronte Howson received remuneration of $2.9 million in the 2012/13 year, down from $3.02 million in the prior year, mainly due to a lower bonus.
Shares in AHG were up half a cent at $3.965 at 1238 AEST.