I am pleased to report that the motor division increased turnover by £658 million to £4.1 billion and pro t before tax by 7.3% to £69.2 million, compared to £64.5 million last year. The acquisitions of Knights BMW/MINI and Drayton Mercedes-Benz made a good contribution to the increase in turnover but it was also pleasing to see organic growth in turnover of £527 million, with acquisitions contributing £131 million of the total increase.
2016 has been a year of transformation for the motor division, with highlights of the year being the acquisition of Knights on 22 August and Drayton on 4 November 2016. Both of these were strategically important and major transactions for the group. Knights was acquired for £26.6 million and represents BMW and MINI from six dealerships in Stoke, Stafford and Crewe and it was also a major milestone in introducing both these prestige brands to the group’s portfolio.
Drayton was acquired for £56.3 million and represents Mercedes-Benz and smart from seven locations in Stoke on Trent, Stafford, Shrewsbury, Wolverhampton, Walsall, Stourbridge and Worcester. The acquisition complements our existing Mercedes-Benz and smart businesses in Kent and Sussex. This has increased our partnership with these brands and the combined business will have an annual turnover of more than £600m and has established us as the leading retailer for Mercedes-Benz and smart in the UK.
Both of these acquisitions have been successfully integrated during the year and will make a further positive contribution in 2017. I am delighted to welcome our new colleagues from Knights and Drayton to Lookers.
We also carried out a strategic review of our brand representation during the year. Our strategy is to have a meaningful representation of the major automotive brands in the larger areas of population in the UK. As part of this review, we decided to relinquish some of our franchise representation of dealerships. This would ensure that all our dealerships were aligned with our strategy and could generate meaningful profits in the future. Following this review we have sold or closed ten businesses and this, together with the two acquisitions, has significantly improved and strengthened the balance of our portfolio of franchise representation.
The UK new car market increased by 2.3% to 2.69 million cars in the year, with the new car retail market being essentially at, with a reduction of 0.2% compared to 2015. The fleet market showed positive growth and increased by 4.3%. Our total new car turnover increased by 20% year-on-year, or 11% on a like-for-like basis.
We have continued to put more focus and investment into the fleet sector and our fleet turnover, including commercial vehicles, increased by 16%, or 13% on a like-for-like basis. The fleet sector is a significant part of the market and is a major profit opportunity, providing scope for organic growth given our lower market share compared to our retail business. Despite this increase in volumes, we have continued to target quality fleet sales and avoid very low margin business. To facilitate this, we continue to make the necessary investment in people with the specialist skills, relationships and reputation in the sector, as well as investing in systems and facilities to process higher volumes.
Gross profit from new cars increased by 11% year-on-year. Whilst new car market conditions were favourable during the first six months of the year, they were less buoyant in the second half. However, the new car market continues to be relatively healthy into 2017 with our order take for the important month of March continuing to build in line with our expectations. Industry forecasts suggest that the new car market will show a 5% reduction this year, although in recent years, these forecasts have been outperformed with volumes being higher than forecast.
Therefore, we have a more optimistic view and believe that the market is likely to be a similar level to 2016. As this was the highest market ever, the outlook for new cars is still positive and is an opportunity for us to increase market share.
Turnover of used cars increased by 19%, or 7% on a like-for-like basis, compared to 2015. Gross pro t increased by 17%, or 7% on a like-for-like basis. This is a positive performance given our used car volumes have increased significantly over the last four years. We continue to focus on stock management and sourcing good quality used cars, both of which help to improve profitability.
The used car market still represents a significant opportunity for the group and this will benefit from the increasing number of leads generated by the group’s website, which have increased by 25% compared to last year. We have seen significant increases in our online visitor and enquiry levels from our improved and responsive website which was launched last year. We plan to develop the website further in order to continue to drive momentum in our online offering.
As well as improving the margin, our high margin aftersales business increased gross pro t by 18%, or 9% on a like-for-like basis compared to 2015, with the margin being maintained at a similar level to last year. The increased profitability has benefitted from the growth in the vehicle parc of cars under three years old and is also due to the initiatives we have made in recent years to develop the aftersales business, with an increased emphasis on performance and specific targets being introduced to improve profitability. We continue to have great success in improving penetration of an increasing proportion of customers who choose to enter into service contracts, which improves customer loyalty and retention.
We have also developed further initiatives to improve the aftersales business, particularly in relation to technology and systems. In this area, we are focussed on improving the customer experience to improve retention levels.
We have previously announced that the group is committed to developing the customer journey through a significant programme of further capital investment planned for the next three years.
This programme will ensure that our entire dealership estate represents the best in class in modern motor retailing. We also announced that we were making a significant investment in our multi-channel customer experience concept.
The internet and our website play a critical and important part of the customer journey, influencing how our customers research vehicles before they enter the showroom. Our in-house digital marketing team now covers all digital marketing activities and the latest version of a new, much improved and fully responsive website, which was launched during the previous year, has resulted in a significant increase in our visitor and enquiry levels. To continue with this momentum we are making further major developments to our website and a new website will be launched later this year. This will result in exciting improvements in functionality and interaction with our customers. Our aim is to produce an industry-leading website, which will improve the customer experience, and ultimately increase sales and profitability.
Good progress has been made during the year and we are introducing new systems which will improve the customer experience further. This will also result in greater operational efficiencies. We believe this will enable us to provide an industry leading customer experience and give us a significant competitive advantage and improved profitability.
Our goal is to be recognised as providing the best customer experience in the UK motor retail sector. We conduct extensive customer research to monitor feedback as we appreciate that customers have high expectations and increasingly more access to detailed product information themselves. We also continue to invest in our technology through new and improved systems.
Our people are the key to help us to deliver our strategy and provide a first class customer experience. We continue to invest in our people with a new training and development programme, including induction training for all new recruits as well as further improvements to our structured and formal management development programme.
We have also made significant enhancements to the holidays and benefits for our people so that we can now offer the most attractive employment prospects in our sector. Our aim is to be the best place to work in our industry so that we can attract and retain the best people to achieve enhanced levels of customer satisfaction and help us become the best in the UK motor retail sector. It was therefore a great achievement in this important area to be the only motor retailer to be awarded the exclusive Top Employers’ United Kingdom 2017 certification. This is a symbol of our commitment to building a positive employee experience and of our commitment to optimise, develop and work with all our people to build a meaningfully and noticeably different experience for them and our customers.
Against a background of an improving but competitive market, our independent parts division made good progress in the period with increases in both turnover and profit compared to the prior year. Turnover for the division in the ten months prior to the sale increased by £4.0 million, up 2% on the prior year, as the business continued to expand by investment in existing and new product lines.
Operating margins improved slightly compared to the prior year and careful control of overheads resulted in a 9% increase in pro t before tax compared to £11.2 million last year. This was a good result for the division in the ten month period and we wish all our colleagues in the parts division every success for the future under their new ownership.
