Mark Martincic, director of fixed operations at KEA Advisors, provided a list of industry benchmarks to provide guidance on what numbers you should be hitting—or better yet, surpassing—when it comes to common key performance indicators.
Overall Dealership
Economic Profit Percentage: 20 percent
Economic Profit $: $0.00
Cash Flow as Return on Investment: 20 percent
Return on Sales: 4 percent
Absorption: 115 percent
Economic Profit Absorption: $0
Current Ratio: 150 percent
Debt to Equity Ratio: 3:01
Sales Gross Profit % total gross profit: 30%
Fixed gross profit % total gross profit: 70%
V/R: <10 days
A/R days supply: <25 days
W/R days supply: manufacturer cycle time plus five days
Sublet inventory: <2 days
WIP inventory: < 2 days
Open Ros: <2 days
Open truck sales (booked, not in accounting): <3 days
Contracts in transit: F&I provided cycle time plus 2 days
RO cycle time: RH billed plus 2 days
Service Department:
Customer gross % : 73%
Warranty gross %: 72%
Internal gross: 72%
Total gross %: 68%
Personnel % gross: 40%
Semi fixed % gross: 17%
Fixed % gross: 13%
Total expense % gross: 70%
Net as % of gross: 30%
Return on technician investment: 110% x (ELR- average technician rate)
Technician productivity: 88%
Technician efficiency: 125
Technician proficiency: 110%
Unapplied time as % of sales: 2%
Service writer productivity: 80 hours billed per day
Policy as % of sales: 2%
Gross effective labor rate: Door rate plus $2
Hrs. per customer RO: 5-7
Customer parts to customer labor: $1
Fixed expense allocation: 42% (note: if dealership has a body shop, change to 28%)
RO open to first punch: 2 hours
RO first punch to last punch:
RO last punch to close: < 2 days
Parts Department
Counter Gross %: 28%
Customer labor gross %: 32%
Warranty Gross %: 24%
Internal Gross %: 32%
Total Gross %: 29%
Personnel % Gross: 45%
Semi fixed % gross: 12%
Fixed % gross: 12%
Total expense % gross: 68%
Net as % of gross: 32%
Freight % Gross: 2%
Cost of sales per person: $30,000-$43,000 per month
Gross inventory turns: 8
True inventory turns: 6.4
Days supply of inventory: 45
Stock order performance: 80%
Level of service from inventory: 90%
Gross return on inventory investment: 232%
Net return on inventory investment: 74%
Inventory obsolescence: 20% over 9 months no movement
Fixed expense allocation: 33%
Variance of book to management report: 2%
Lost sales (pieces): 4 per counter person per day
Dirty cores: None over 30 days
Dirty core vs. liability: 100% credit vs. vendor availability
Body Shop
Customer gross %: 68%
Warranty gross %: 68%
Internal gross %: 68%
Total gross %: 65%
Personnel % gross: 50%
Semi fixed % gross: 17%
Fixed % gross: 13%
Total expense % gross: 80%
Net as % of gross: 20%
Gross profit per man hour invested: 123% x (ELR- average technician rate)
Technician productivity: 88%
Technician efficiency: 140%
Technician proficiency: 123%
Unapplied time as % of sales: 2%
Policy as % of sales: 2%
Fixed expense allocation: 14%
