THE trading update for one of Australia’s ‘big three’ listed automotive retailers reflects weaker trading conditions but has revealed a record outlook for used car sales and defined a strong market in smaller, more efficient vehicles.

In a statement to the Australian Securities Exchange (ASX), Peter Warren Automotive Holdings Ltd (PWR) said that it expects profit before tax for FY26 to be in the range of $12 million to $15 million.

It cautioned that it has seen a “significant deterioration in trading conditions over recent weeks” and that its outlook for May and June “which typically represent a large proportion of the company’s annual result” is subdued.

PWR CEO Andrew Doyle

In reaction to the outlook and to boost performance, PWR said it was accelerating its used-car activities and expects that it will turn a record result in FY26.

Also expecting a record result for the current financial year is PWR’s service and parts division, which the company said would continue to be strengthened.

PWR will also “optimise its brands” and their showroom footprint to meet evolving customer preferences, particularly the strengthening demand for smaller, more fuel-efficient vehicles including EVs. 

“In addition, despite persistent high levels of inflation, cost-management initiatives have been implemented including leveraging the company’s scale and property footprint,” it said.  

In the statement, PWR said the weaker outlook “reflects intense pressure on new-car trading margins”.

It attributed this pressure to a rapid shift in customer demand which has been driven by fuel prices rising on the fallout of the US-Iran conflict; three Reserve Bank interest rate rises; and the resulting effects on the cost of living.

“New-car buyers are favouring smaller, more fuel-efficient vehicles and fewer high margin vehicles often purchased with accessories,” it said. 

PWR also said that there was now significant competition in the Australian market with new market entrants competing with existing brands for market share, further impacting new-car margins.

“This rapid change in demand is also impacting vehicle availability and year-end deliveries of  certain high demand models. Order banks have increased substantially as a result,” it said. 

In his report, PWR CEO Andrew Doyle said trading conditions in recent weeks had been “unprecedented”.

“Customer preferences are changing rapidly, accelerated by increased fuel prices and  cost of living pressures,” he said.

“When coupled with some uncertainty in vehicle supply chains, we will enter  FY27 with a much higher order bank.” 

He said competition in the Australian marketplace had never been greater. 

“We have been increasing the pace of change in the company, continuing to add new brands to our portfolio,” he said.

“Our overall order intake is up significantly, with exceptional growth in our recently added Chinese brands. We are well placed as new and attractive models continue to come to market.” 

He said that PWR is focussed on strengthening revenue and cost efficiency within areas of the business “that we can control”.

“This includes further leveraging our existing asset base, particularly as we expand our  representation of newly introduced brands, while continuing to grow our used vehicle, service and  parts operations.” 

Peter Warren Automotive has been operating in Australia for more than 65 years and now has more than 80 franchise operations representing over 30 OEMs in the volume, prestige and luxury segments. 

The listed company operates across the east coast under banners including Peter Warren Automotive, Frizelle Sunshine Automotive, Sydney North Shore Automotive, Mercedes-Benz North Shore, Macarthur Automotive, Penfold Motor Group, Bathurst Toyota and Volkswagen and Euro Collision Centre.

By Neil Dowling