Citygate Automotive’s operating loss widened to £4.23 million in 2025 as rising costs and margin pressure outweighed higher vehicle sales.
The AM100 top 50 dealer’s accounts for the year to December 31 show an operating loss of £190,628 in 2024, while turnover increased 4.9% to £435.3m.
Citygate recorded a pre-tax loss of £4.05m, compared with a £217,670 profit a year earlier. Its strategic report described this as its lowest pre-tax result since the financial crisis of 2007/08.
The company has reshaped its dealership portfolio, reduced its cost base and restructured senior management.
Directors reported a stronger result in the first half of 2026.
Stock and staffing costs increase
Citygate’s cost base rose 9.5% during 2025, with directors identifying new vehicle stock levels as a significant source of additional expense.
Higher stock holdings increased funding charges, storage and vehicle movement costs.
The company also faced higher employers’ National Insurance contributions, increases in the national minimum wage and start-up costs for its vehicle leasing brokerage.
The strategic report identified downward pressure on gross margins from the ZEV mandate and competition from new Chinese brands, alongside rising rent, rates and people costs.
Gross profit increased from £51.6m to £52.7m, but gross margin fell from 12.4% to 12.1%.
Distribution costs rose from £30.6m to £33.7m, while administrative expenses increased from £21.9m to £23.8m.
Vehicle sales and workshop hours grow
New vehicle sales increased from 7,281 to 7,679, while used vehicle sales rose from 7,320 to 7,729.
New vehicle turnover grew 6.7%, although average transaction values fell 1.4%. New vehicle gross margin remained steady following a substantial reduction in 2024.
Directors also highlighted pressure from manufacturers pushing surplus stock onto dealers.
Used vehicle turnover increased 2.8%, but its gross margin declined significantly.
Aftersales turnover grew 4.9%, supported by an increase in service hours sold from 168,452 to 182,290. Bodyshop hours fell from 58,998 to 44,637.
Dealership portfolio reshaped
Citygate acquired the Volkswagen dealership in St Albans from Marshall Motor Group during 2025 to strengthen its representation in the region.
Its Twickenham Seat and Cupra dealership became an aftersales operation covering Volkswagen, Skoda, Seat and Cupra, with vehicle sales transferred to West London.
Volkswagen sales also ended at Chalfont, directing additional volume to High Wycombe and Watford. The aftersales business remained open.
Citygate sold its loss-making Seat Reading dealership to Marshall and terminated its loss-making GWM franchise in High Wycombe, which the accounts stated would finish in 2026.
Volkswagen Commercial Vehicle sales at Colindale transferred to St Albans, with Colindale converted into an aftersales operation for Volkswagen cars and vans.
The board was considering future uses for showroom facilities available at Twickenham and Chalfont.
In the strategic report, directors said: “The 2025 result was disappointing in a challenging market environment.”
They reported that changes to the dealership portfolio, cost reductions and steps to put the right people in place to drive recovery had produced a much stronger result in the first half of 2026.
Net assets stood at £13.2m at the end of 2025, compared with £17.3m a year earlier.
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