Donnelly Group reported lower profits in 2025 despite higher turnover, with the Northern Ireland dealer group citing pressure from the zero emissions vehicle (ZEV) mandate and wider economic conditions.
Accounts filed for the year ended December 31, 2025, show operating profit fell to £5.16 million from £5.64m in 2024, while return on sales eased to 1.5% from 1.7%.
Turnover increased to £350.8m, up from £329.8m the previous year, as the group continued to expand its franchise portfolio and outperformed the Northern Ireland new car market.
Pre-tax profit declined to £4.36m from £4.83m in 2024.
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Impact of ZEV mandate
In the company’s accounts, the Donelly Group directors highlighted the impact of the ZEV mandate on consumer demand.
The report said: “The ZEV mandate is having a damping impact on the new vehicle market, with customer demand lagging targets.
“Without further consumer stimulus and improvements in charging infrastructure, the ZEV mandate will continue to restrict retail market growth.”
The commercial vehicle market declined by 5.9% during the year, although Donnelly reported 0.4% growth in its own van sales.
Used vehicle market is a bright spot
The dealer group said the used vehicle market grew by 6.8% and is now only 4.5% below pre-Covid levels.
It added: “We expect this market to be the growth sector in the industry over the next few years.”
Looking ahead, the directors said inflationary pressures and higher taxation would continue to place greater emphasis on cost control and operational efficiency.
The report said the group’s strategy remains focused on sustainable revenue growth, scaling the business through its manufacturer partnerships and adapting to industry changes including electrification and the arrival of new vehicle brands.
During 2025, Donnelly completed a £7 million investment at its Dungannon dealership, adding Volkswagen Passenger Cars, Skoda and Cupra franchises.
The group also opened new Volkswagen Passenger Cars and Skoda dealerships in Ballymena, giving it responsibility for all Volkswagen Group brands outside Belfast.
The directors said trading in the opening four months of 2026 was in line with expectations and forecast profits for the full year to be comparable with 2025.