Here are a few basic ideas that should have a positive impact on gross profit (GP). Most of you are familiar with them but knowing them does not mean they are effectively applied. These are areas that I believe should form part of your daily, weekly or monthly reviews.
Purposely look at your new stock holding in terms of what you have, what is due from the factory and what stock you are short of. I have found that it is always possible to buy scarce stock from dealers if your stock controller is tasked to do so. In terms of stock on hand and incoming, how do enquiries look for the stock that is available. Get into the details to see if there is opportunity somewhere.
Know the make-up of the “second gross”. Which salespeople are generating second gross? What is the make-up of the “second gross”? Do you have a “second gross” plan or objective and if so, are all your salespeople up to speed on the expectations?
Analyse your closing ratios per salesperson, per model and per enquiry source. Knowing these ratios is vital when trying to optimize the performance of vehicle sales. Ensure that you know enquiries received per used car – if enquiries are high, why has the car not sold? If enquiries are low, is your pricing or marketing of the vehicle, correct?
Do you have a formal process for managing “workshop” quoting? How many clients request a quote? Who decides on pricing of the quote? How is the quote presented to the client? How many quotes are successful – your closing ratio?
How many parts sales enquiries do you receive per day? How would you expect these to be managed by your salespeople? What is the conversion ratio of enquiries to sales? Do you record “lost sales” and the reasons?
In summary, just a few ideas that would certainly improve GP in any dealership. They are simple and easy to implement if you are looking to improve dealership performance.
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Mazda South Africa has added a new model to its CX-3 range, one of the better selling nameplates of the brand.
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Have you ever noticed that anybody driving slower than you is an idiot, and anyone going faster than you is a maniac?
George Carlin
Volvo Trucks South Africa recently announced its top achieving dealers for 2025, recognising excellence across 23 categories spanning over its full value offering, including parts, finance, service, uptime solutions, safety, and technical services.
The Human Auto Group in the Free State and Northern Cape once again showed its strength, winning the Group Dealer of the Year for the 6th consecutive time at the recently held Ford Recognition Awards.
Navigating the various ways to pay for a vehicle can be as complex as choosing the car itself. However, understanding all the options available is critical to ensuring long-term financial wellness when finally buying that dream car.
