Used-vehicle demand ‘resilient’
Turners Automotive Group says demand for used vehicles has remained resilient over the past year despite some economic pressures.
Its latest annual report notes the company is New Zealand’s largest buyer and seller of vehicles, combining a national network of branches with a growing online presence.
The company says its automotive retail revenue and profit for the 2025 financial year was down from the prior period, but its sales volumes and market share increased.
“Auto retail remains our largest division and the pressure it faced in the first half was no small matter,” the report says.
“But even in worse conditions than the Global Financial Crisis, we proved that demand for used vehicles is resilient.
“Although margins were squeezed for a period, our ability to proactively manage and recover margins in the second half was pleasing.”
It adds a local sourcing strategy provides a competitive advantage and higher margins for the company.
As for the commercial division, margins were under “severe pressure” in the first half and fell 16 per cent year-on-year as it aggressively discounted stock to achieve sales volumes.
“However, our disciplined approach to stock management positioned us well for when the market stabilised.
“Turners’ shift from wholesale to retail continues, as we continue to open new dealerships.”
The report, released to the NZX on June 24, notes that for each additional vehicle sold through retail, rather than at auction, Turners makes about an extra $1,000 per vehicle.
It says a key to achieving a higher percentage of retail sales is the creation of more capacity through its branch network.
“We know the combination of a larger retail presence brings additional opportunities to source vehicles which will lead to additional sales.”
Finance
Turners says it is targeting high quality consumer and commercial lending, primarily for automotive customers.
Loans originate through the Turners Auto Retail network, independent dealers and brokers and the average consumer loan size, based on new consumer lending in the 2025 financial year, is $19,500.
An average 60 per cent of new consumer lending was premium tier in the past year and the company had more than 28,000 consumer loans as of March 31, 2025.
The finance division held $447 million in receivables in the last financial year.
Insurance
The company offers motor vehicle, loan protection and life insurance solutions through more than 700 licensed car dealers, finance companies and brokers, and life insurance advisers as well as online.
It sells about 5,500 insurance policies every month, including car insurance, and $40.8m in new policies were sold in the 2025 financial year.
A total of $21.2m was paid out during the same period, at an average of 1,124 claims being paid out every month.
Credit management
Turners says debt collection and credit management, for corporate and small and medium-sized enterprises, provides income diversification for the group.
Some $187m in total debt was loaded in the past year, with a 22% average recovery rate and $42m collected from debtors.
Servicing and repairs
The group notes it purchased 50 per cent of My Auto Shop in August 2024 and it is currently helping service and prepare vehicles for sale on Turners sites.
It plans to rebrand this to Turners Servicing & Repairs and launch the newly named enterprise in the first quarter of the 2026 financial year.
Past year at a glance
Turners delivered a record profit and dividends in the 2025 financial year, capping off a decade of sustainable growth.
While there were challenging economic conditions and depressed consumer sentiment, particularly in first half year, the company reports a strong recovery in second half, with the economic cycle moving to a more positive mode.
“Economic challenges and rising unemployment put pressure on borrowers, however, Turners’ arrears have remained consistent and outperformed the broader market,” the report states.
“Dealer numbers have continued to decrease over the last six years and are expected to reduce further.
“EVs remain a very small part of the total New Zealand fleet, at around two per cent.
“The last year saw a material impact on the used import market with continued changes in government regulation, resulting in a 21 per cent decrease in used overseas imports registered in NZ over FY25.”
Turners says its diversified business model is creating sustainable, profitable growth and pointed some of the commercial highlights from the 2025 financial year.
• Auto retail: Revenue declined due to a higher proportion of lower-value vehicle sales, but this was largely offset by increased volumes and solid margin recovery in the second half. Auto retail provided 70 per cent of revenue and 45 per cent of Turners’ profit.
• Finance: Profitable growth supported by interest rate tailwinds.
• Insurance: Solid growth with momentum building in the digital/direct to consumer platform.
• Credit management: Debt load continuing to build, particularly for SMEs.
• Invested in growth with 50 per cent acquisition of My Auto Shop, which provides mobile servicing and repairs, and $1m investment in Quashed insurance platform.
• Expanded the property footprint with a new commercial site in Tauranga, doubling the size of its Invercargill operation, and commencing work on three new branches in Christchurch.
Leaders’ views
Chairman Grant Baker and Todd Hunter, chief executive officer and managing director, say the company is delivering on its growth plans.
In commentary from the pair in the report, they note net profit before tax grew to $54.3m, a 10 per cent increase from the previous year, and net profit after tax was $38.m, up 17%.
Earnings per share have risen to 43.3c and the company delivered a full-year dividend of 29c per share, nearly tripling from 10 cents in 2015.
“We have continued to expand our physical footprint with new property developments and upgrades completed during the year,” they continue.
“Our iconic ‘big blue walls’ popped up in more locations, helping to reinforce brand visibility and create a consistent, trusted customer experience.
“These investments are strategically located to support future growth, improve operational efficiency, and enhance the buying and selling journey for our customers.
“With each new site, we’re not just adding square metres. We are strengthening our position as New Zealand’s leading vehicle retailer.
“Our property portfolio currently comprises a total of 17 sites at a cost of $129m. We are very pleased to have almost completed the branch expansion plan in Christchurch, with three brand new branches in operation in the city by the end of Q1 FY26.
“In the last 12 months, we have also completed a new commercial site in Tauriko, Tauranga and doubled the size of our Invercargill operation. We have a number of live conditional offers we are working on in the wider Auckland area and in Whanganui.”
Outlook
Baker and Hunter say as the company moves into the 2026 financial year, they are feeling optimistic about the road ahead.
While New Zealand’s economic recovery is expected to be gradual, the signs are pointing in the right direction – particularly with interest rates starting to ease, which should give consumers and the broader economy a much-needed tailwind.
The auto retail business is back in growth mode and the company’s proactive margin management helped it bounce back strongly in the second half, “and we’re now seeing momentum building across all parts of the business”.
The pair add they are confident in continued profit growth as Turners heads towards its medium-term earnings target of $65m.
“We expect strong contributions from our newest big blue wall in Christchurch, with more new branches on the way,” they continue.
“Gains in market share, solid performance from our annuity businesses – finance and insurance – and increasing operating leverage across the group all give us a solid platform to keep delivering.
“We’re tracking well, and we believe we’re on course to hit our FY28 targets ahead of schedule.”
Outlook by divisions
• Auto retail: The benefits of an expanded network in Christchurch are expected to flow through in the first half of FY26. Turners says it remains focused on accelerating the transition from wholesale to retail, although progress is slower than initially anticipated. Vehicle pricing has stabilised and margins are projected to remain in line with H2 FY25. Overall, sales volumes are expected to continue tracking ahead of FY25 levels.
• Finance: Maintaining credit discipline remains a key priority and it anticipates solid book growth, supported by prudent lending practices and a focus on portfolio quality, in the current year. It also expects continued improvement in its interest margin, reflecting ongoing optimisation of funding and pricing strategies.
• Insurance: Earned premium is holding up well and claims ratios are expected to remain stable. Additional contributions are expected from recently established distribution arrangements and the continued growth of direct sales channels. The motor vehicle insurance portfolio is projected to maintain its strong growth trajectory.
• Credit management: Turners expects EC Credit to continue benefiting from the tailwinds of a challenging economic environment for at least the next two to three years. As debt levels rise because of tightening conditions and increasing consumer arrears, its payment bank is rebuilding to support growing demand. The group says it remains well positioned to navigate and capitalise on the next phase of the New Zealand credit cycle.
