Mahindra’s Fusion Fest ready to blast off
The SunBet Arena in Pretoria is a hive of activity as Mahindra South Africa finalises preparations for its historic Fusion Fest this Saturday (22 February).
- Industry News
- 21 February 2025
As we all know, the profit of a motor dealership comes from several areas and each of them needs to be monitored closely if you want to ensure that your dealership performs well.
Within each department or process, the gross profit of that process or department can be made up of many components and each of those components should be managed for the overall GP to be where it should be.
Firstly, identify the components that make up the GP of a department and include them in your budget and management reporting.
Vehicle GP – selling price, cost, PDI, Recon, provisions, factory-fitted accessories or options, discounts, over allowance, OE incentives.
Accessory GP – fitted by the dealership – selling price, cost.
Delivery Fee/Documentation Fee/Admin Fee GP – costs may include fuel, gifts, out of town delivery, number plates.
L&R GP – selling price, costs of L&R, costs of L&R agent.
Warranty GP – selling and cost prices – can distinguish between OE and in-house/aftermarket products. Could also be commission only depending on the vendor.
Maintenance Plan GP – as per Warranty.
Service Plan GP – as per Warranty.
Top Up – as per Warranty.
Tyre Warranty – as per Warranty.
Dent Warranty – as per Warranty.
Bank DIC.
Each dealership will have its own interpretation of these components and how to account for them but each of them should be visible to management so that performance can be monitored.
When budgeting for these items, the following should be considered:
Type of vehicle – LCVs will naturally include more accessories than passenger cars;
Type of client – fleet/tender/rental will influence the products that will be sold;
Anticipated OE product mix – base-line vehicles will have more potential for additional products than “full house” vehicles.
One also needs to consider what the OE model mix and volumes are as well as what access you will have to those models – you can’t plan to sell 50 ‘Model X’s” per month when the OE will only have 20 available.
In summary, your GP is “hiding” in the detail.
The SunBet Arena in Pretoria is a hive of activity as Mahindra South Africa finalises preparations for its historic Fusion Fest this Saturday (22 February).
Digi Cars Group, a dealership group in the South African automotive industry, is making an impact at this year’s EidFest, which is taking place at the Gallagher Convention Centre from Thursday, 20 February to Sunday, 23 February 2025.
The team at Jetour Alberton recently took to heart the manufacturer’s pledge to engage in corporate social responsibility initiatives. The dealership visited Umkhathizwe and Nageng primary schools to make a tangible difference in the lives of school children.
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If you are not taking care of your customer, your competitor will.
Bob Hooey
The team at Jetour Alberton recently took to heart the manufacturer’s pledge to engage in corporate social responsibility initiatives. The dealership visited Umkhathizwe and Nageng primary schools to make a tangible difference in the lives of school children.
BMW Group South Africa hosted its 2024 Retailer of the Year Awards recognising the achievements of its retail network across the BMW, MINI and BMW Motorrad brands.
Improving gross profit in a motor vehicle workshop involves a combination of effective management practices, operational efficiencies, customer engagement and strategic marketing.