At some stage in the next twelve months, you are going to be faced with drawing up budgets for the next financial year. Simply taking last year’s performance and adding or subtracting from those numbers for your budget is really easy but mostly ineffective.
I detail below some critical inputs that should be considered when budgeting for your new vehicle Gross Profit (GP):
Once you have the volumes and model mix for your area, you need to calculate/estimate the selling price of your models as well as the GP% you expect per model.
What are you going to charge for PDI? This needs to be considered as part of your cost of sale.
With the above info, you will be able to calculate the dealership’s new vehicle volumes, average selling price and GP for new vehicles (first gross).
I like to break down GP into first gross, second gross and F&I gross:
Second gross consists of all additional products that are not finance or insurance related. This includes accessory sales, “3 in 1” sales, window tint, documentation fees, admin fees and any other products that you sell that are not finance and insurance related.
You need to consider model mix when determining your second GP as the potential for accessories on an LDV is way higher than it is for an entry-level car.
F&I GP is you finance commission, warranty sales and GP, maintenance/service plan sales and GP.
Lastly, you may want to include a provision for after-sales, advertising or any other type of provision that you deem necessary.
In order to pinpoint performance, I would recommend a separate line item for each of the components that make up first GP, second GP and F&I GP. It is then much easier to measure areas of performance and non-performance.
It has come to the attention of Knysna Speed Festival, the owner of the Simola Hillclimb, that Zwartkops Raceway has used Simola Hillclimb’s event regulations for its Top of the Hill event to be held in October.
Continuing the company’s founding vision of Being the Best, is the responsibility of the third generation of Emanuel brothers leading two divisions of the KwaZulu-Natal-based (KZN) automotive mobility group.
BMW Group Financial Services South Africa has announced the appointment of Roger Rooden (photo) as Chief Financial Officer (CFO) of BMW Group Financial Services South Africa.
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You can't buy happiness but you can buy cars and that's kind of the same thing.
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Continuing the company’s founding vision of Being the Best, is the responsibility of the third generation of Emanuel brothers leading two divisions of the KwaZulu-Natal-based (KZN) automotive mobility group.
The foundation has been laid, the eyes are on us, and we are ready for the future. So says Ernst Dörnbrack, Dealer Principal (DP) at Westvaal’s award-winning Stellantis dealership in Paarl in the Western Cape.
A long list of awards, including Dealer of the Year accolades, runner-up awards, and a host of other much sought-after trophies during the last ten years, and as recently as this year, is a testament to the accomplishments of the Fuzion Motor Group.
