Dealers rely heavily on fixed operations (parts, service, and body shop sales) to absorb a sizable portion of a dealership’s overhead.
Here are the results of our dealer clients for the nine months ended September 30, 2023.
Service Departments Show Continued Growth
- Sales growth in service continues with over 88% of our dealer clients showing growth compared to the prior year. This is on top of the increases that were reported in the prior year.
- On average, service sales grew by nearly 13%.
- Gross profit dollars are increasing as well.
- Gross margins have ticked upwards to an average of 67.2%.
Parts Departments Remain Strong
- Driven in part by increased service sales, nearly 85% of our dealer clients saw parts sales grow. Impressive considering a similar percentage reported increased sales in the prior year.
- On average, parts sales rose over 11.5%.
- Gross margins remained relatively unchanged and in the 33-34% range.
Body Shop Departments Following Suit
- On average, 63% of body shops reported increased sales.
- 9.6% was the average increase in sales.
- Gross profit percentages have increased for virtually all and average around 54%.
Fixed operations remain the backbone to dealer profitability. With profits on vehicle sales trending towards pre pandemic levels, fixed ops profits will become increasingly important. With the increase in electric vehicle sales, dealers will be challenged to properly equip their dealerships and train technicians to service EV models.
If you have any questions regarding this article, please contact Charlie Paolino at CPaolino@DowneyCoCPA.com or at 800-849-6022.
