
New appointment at Dunlop Tyres South Africa
Dunlop Tyres South Africa has announced the appointment of Thuli Gasa as Head of Corporate Services, serving as a full member of the Executive Committee.
- Industry News
- 31 May 2025
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.
South Africa’s top-performing Finance & Insurance (F&I) professionals in the automotive retail sector were honoured at the prestigious 2025 Lightstone Auto Star Reacher F&I Awards held this past weekend.
Whether you are an owner or your dealership is owned by a corporate, it always has a value. In broad terms, this value is made up of two parts. The first is the net asset value of the dealership and the second is the goodwill of the dealership. It is on this basis that most motor dealerships are bought or sold.
Mitsubishi Motors South Africa has awarded dealers and select dealership staff for strong performances across a variety of dealership roles.