It's been a challenging year, but March and April results showed promise, and things are looking good for the summer selling season.
Certain economic news is encouraging, including the crude-oil price decrease resulting in real savings for consumers at the pump. This may help diminish fears about rising fuel prices.
Interest rates, as they relate to the consumer, currently appear to be a non-issue. It seems the pieces are falling into place and business and sales should be good for the industry this summer.
The chart at right represents selected information gathered from the NCM client database. It represents average dealership performance categorized by segment in the first quarter of 2005. There is space for you to insert and compare your individual performance with the NCM average.
But first review the chart below as it relates to sales, gross and expenses this year compared with the same period in 2004.
There are so many pressures on us from an expense standpoint (i.e., interest, employment costs such as health care, worker compensation and wages), we must identify efficiencies and install processes that allow us the returns we desire. An industry executive tells me, “We must become experts at managing our costs.” If maximize gross, expense percentages must first fall in line.
|Category — NCM Average Dealer||Domestic||Import||High-Line||Our Dealership|
|Total Dealership Dollar Sales||-3.1%||4.7%||4.0%||%|
|Total Dealership Gross Change||-1.3%||5.4%||1.1%||%|
|Total Dealership Expense Change||1.8%||5.3%||8.3%||%|
As we all know, the first quarter is typically not the most robust, but it can set the stage for the following three quarters.
Take a hard look at each individual expense while identifying methods which will allow you to maximize your gross in each department. We have the best selling months in front of us, but position your operation now to take full advantage of those better times to come.
Tony Noland is the president and CEO of NCM Associates Inc. He's at [email protected].
|NCM Associates Key Category / 1st Quarter, 2005||Dom.||Our Dlrshp||Import||Our Dlrshp||High-Line||Our Dlrshp|
|Net Profit As % Total Sales||1.9%||2.7%||3.5%|
|Departmental Gross % Dealership Total|
|Mechanical Service Dept.||22.7%||24.1%||29.9%|
|Body Shop/Collision Repair||9.0%||10.1%||6.6%|
|Departmental Profit % Dealership Total|
|Mechanical Service Dept.||16.3%||33.2%||23.9%|
|Body Shop/Collision Repair||1.2%||3.0%||0.1%|
|Key Expenses % Total Dealership Gross|
|Expense Category As % Total Expenses|
|Gross Per Employee Average Month||$6652||$7620||$9982|
|Productive Employees % Total Employees||53.8%||56.3%||50.9%|
|Techs (Body + Mech) % Total Employees||23.9%||21.0%||23.1%|
|New & Used Veh. Sales Pers. % Ttl. Emp.||20.9%||23.6%||17.4%|
|Managers % Total Employees||14.5%||13.7%||10.3%|
|Clerical % Total Employees||12.5%||12.3%||13.0%|
|Asset Management: March Month End|
|New Car $ Days Supply||80||63||42|
|New Truck $ Days Supply||91||50||46|
|Used Car $ Days Supply||58||51||50|
|Used Truck $ Days Supply||55||49||54|
|Used Vehicle Performance|
|Inventory Turn — Cars||.5||.6||.6|
|Inventory Turn — Trucks||.6||.6||.6|
|% Total Used Car Inv'y 61 Days + (Units)||10.4%||6.1%||1.6%|
|% Total Used Trk Inv'y 61 Days + (Units)||10.8%||15.4%||3.7%|