Pitcher Partners Automotive - Key performance indicators for automotive retailers
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Pitcher Partners Automotive Key performance indicators for automotive retailers 2018/2019 edition (Luxury and Non-Luxury)
Contents Automotive services 1 Non-luxury edition 2 Luxury edition 4 About Pitcher Partners 6
Automotive services
Welcome to the 2018/2019 Pitcher Partners Automotive Key Performance
Indicators for Australian Automotive Retailers – Non Luxury and Luxury Editions
New vehicle sales Retail automotive challenges
The sale of new vehicles has seen a reduction A key issue impacting the future profitability
in units sold for the calendar year 2018 in of the retail automotive industry in Australia
comparison to the same period in 2017. Total vehicle sales is in relation to commission models and structures in
in June 2018 amounted to 130,300 units, which represents the context of ASIC’s prohibition of flexible commission
a 2.9% reduction on the 134,171 units sold in June 2017. arrangements as announced in March 2017 and effective
However, overall new vehicle sales have increased by 1% from 1 November 2018. ASIC’s decision not only means the
to 605,522 units for the six month period to 30 June 2018, banning of flex-commissions, but also imposes restrictions
in comparison to the 599,552 units sold in the six month on interest rates and origination fees, giving greater power
period to 30 June 2017. to lenders. This decision will impact dealership profitability
and will mean a shift in focus towards penetration in order
The increased trend in SUV and light commercial vehicles
to maintain current commission levels amongst tightening
has continued into 2018, with the Toyota Hilux and Ford
credit conditions. We also have the ACCC focusing on the
Ranger models accounting for Australia’s two highest
new car retailing industry, issuing a final report on 14
selling vehicles. These two vehicles continue to perform
December 2017 with key market observations centred
well in the first half of calendar year 2018, with over
around protections for customers when purchasing new
26,000 Toyota Hilux vehicles sold and over 22,000 Ford
cars and access to information and data required to repair
Ranger vehicles sold in the six month period to June 2018.
and service new cars.
With regards to the 2017 calendar year, official sales
Other key issues impacting the automotive industry
amounted to approximately 1.189 million units, which
are with reference to technology and innovation, with
accounted for a 1% increase in sales for the 2016 calendar
the emergence of various car sharing companies in the
year (1.178 million units). This was another record year of
last few years. This presents challenges to automotive
sales and is the eighth consecutive year in which new car
dealerships as consumers’ attitudes towards car
sales have exceeded one million units.
ownership is changing and may result in declining
Consistent with previous years, Toyota and Mazda demand for vehicles in the future. This is also compounded
continue to generate the highest volume of sales, with by surging online vehicle sales, which are continuing
Hyundai, Holden and Mitsubishi rounding out the top to increase each year. Further, automotive dealerships
five vehicle sales by manufacturers, and accounting for are rethinking their current business models, with
approximately 51% of total new retail vehicle sales in shifts to online/virtual platforms starting to come in to
calendar year 2017. However, we also witnessed Ford effect. Dealerships will need to focus on and adapt with
falling out of the top five sales by manufacturer, despite technological developments that will result in better
having its Ford Ranger model as the second highest selling relationships with the manufacturer, dealer and consumer.
vehicle in the 2017 calendar year.
Conclusion
Australian economy Overall, we expect new vehicle sales to continue
The Australian economy accelerated in the to hover around the one million sales mark for
first quarter of 2018, recording a (seasonally- calendar year 2018, in line with VFACTS forecasts, with
adjusted) rise of 1%, the fastest growth rate in two years. sales of SUV’s continuing to underpin this growth.
This took the year-on-year GDP growth rate to 3.1% (a
seven year high). Despite increased activity in many parts The unknown
of the economy, household consumption continues to be
With the potential for disruption in the
relatively subdued. Consumer spending increased by just
traditional retail automotive business model, the
0.3% in the first quarter and is largely a result of negligible
dealer will need to shift from a product-driven model to a
wage growth (the lowest on record) and high debt levels.
customer-centric one and become the preferred provider
Household savings are unlikely to be re-directed into
of mobility solutions (with autonomous driving technology
consumption whilst these two factors exist, which may
and a world of car sharing changing customer preferences).
impact on new vehicle sales moving forward.
Dealers will also need to work hard in maintaining
their position as original equipment supplier workshop
providers. The new world of automotive retail will require
dealers to rebalance their physical and digital assets.
In saying that, dealers have always been good at adapting
– an innovative car dealer is a car dealer of the future.
1
Non-Luxury edition
The Big Picture
Dealership Profitability 2018/2019 KPI Gross Contribution 2018/2019 KPI
Net profit % sales 3.0-3.5% New 33%
Rent % gross 13% Used 20%
Admin & DP salary % gross 10% Front-end 53%
Gross % sales 10-12% Parts 13%
Monthly gross per employee $12,000-$13,000 Service 34%
Net profit per employee $2,750 Back-end 47%
Fixed absorption (minimum) 55% Finance and 18-22% of total gross
insurance income
Vehicle Operations
New Vehicles 2018/2019 KPI Used Vehicles 2018/2019 KPI
Gross profit % 7-9% Gross profit % 12-13%
Gross profit per unit * $2,200-$2,400 Gross per unit $2,300-$2,500
Days’ supply 60-65 Days’ supply 65-70
Unit per sales staff per month 12-14 Unit per sales staff per month 13-15
Gross per sales person per month $35,000 Gross per sales person per month $34,000-$37,000
Advertising per unit $225 Advertising per unit $215
Floor plan per unit $280 Floor plan per unit $160
Salaries & comm. per unit $720 Salaries & comm. per unit $740
Gross ROI 60-65% Used/new ratio 0.5
Aftermarket income per unit $300 Gross ROI 65-70%
* Includes holdback, bonuses and aftermarket Aftermarket income per unit $250
2
Fixed Operations
Parts 2018/2019 KPI Service 2018/2019 KPI
Gross profit % 23-25% Gross profit % total 65-68%
Days’ supply 45-50 Gross profit % labour 75-80%
Monthly gross per staff $18,500-$20,000 Monthly labour gross per tech $12,500-$13,500
$ sales per $ salary $18-$20 Unapplied time % COS 5% max
Gross ROI 200-220% Non-chargeable salaries % gross 25-30%
Fixed absorption (minimum) 55% Back-end 47%
* Apprentices and foreman are weighted to arrive at an Chargeable to non-chargeable 2 to 1
adjusted number of technicians
Labour hours per retail RO 2.0 hours
Technician to service advisor 5 to 1
Parts / labour ratio $0.65
Fixed absorption (minimum) 55%
Finance and Insurance
New Vehicles 2018/2019 KPI Used Vehicles 2018/2019 KPI
Finance penetration 40-45% Finance penetration 40-45%
Income per contract $2,400-$2,700 Income per contract $2,600-$2,800
Finance per retail unit $900 Finance per retail unit $860
Insurance per retail unit $160 Insurance per retail unit $170
F&I income per staff per month $50,000-$55,000
Units retailed per F&I staff 50-55
per month
F&I per new vehicle retailed $1,200 - $1,350
F&I per used vehicle retailed $1,050 - $1,150
3
Luxury edition
The Big Picture
Dealership Profitability 2018/2019 KPI Gross Contribution 2018/2019 KPI
Net profit % sales 3.8-4.2% New 42%
Rent % gross 12% Used 12%
Admin & DP salary % gross 7% Front-end 54%
Gross % sales 12-15% Parts 14%
Monthly gross per employee $11,500 Service 32%
Net profit per employee $2,600 Back-end 46%
Fixed absorption (minimum) 55% Finance and 11-13% of total gross
insurance income
Vehicle Operations
Vehicles 2018/2019 KPI Used Vehicles 2018/2019 KPI
Gross profit % 10-12% Gross profit % 10-12%
Gross profit per unit * $4,000-$4,500 Gross per unit $2,400-$2,600
Days’ supply 60-65 Days’ supply 65-70
Unit per sales staff per month 11 Unit per sales staff per month 12-14
Gross per sales person per month $45,000-$50,000 Gross per sales person per month $30,000-$36,500
Advertising per unit $450 Advertising per unit $200
Floor plan per unit $350 Floor plan per unit $100
Salaries & comm. per unit $1,200 Salaries & comm. per unit $800
Gross ROI 60-65% Used / new ratio 0.4
Aftermarket income per unit $350 Gross ROI 70-75%
* Includes holdback, bonuses and aftermarket Aftermarket income per unit $250
4
Fixed Operations
Parts 2018/2019 KPI Service 2018/2019 KPI
Gross profit % 22-25% Gross profit % total 65-70%
Days’ supply 45-55 Gross profit % labour 76%
Monthly gross per staff $20,000-$22,000 Monthly labour gross per tech $13,500-$14,500
$ sales per $ salary $18-$20 Unapplied time % COS 5% max
Gross ROI 200-220% Non-chargeable salaries % gross 30%
* Apprentices and foreman are weighted to arrive Chargeable to non-chargeable 2 to 1
at an adjusted number of technicians
Labour hours per retail RO 2.2 hours
Technician to service advisor 5 to 1
Parts / labour ratio $0.75-$0.80
Fixed absorption (minimum) 55%
Finance and Insurance
New Vehicles 2018/2019 KPI Used Vehicles 2018/2019 KPI
Finance penetration 34-38% Finance penetration 30-35%
Income per contract $2,300-$2,500 Income per contract $2,100-$2,300
Finance per retail unit $850 Finance per retail unit $720
Insurance per retail unit $180 Insurance per retail unit $170
F&I income per staff per month $50,000-$55,000
Units retailed per F&I staff per 50-55
month
F&I per new vehicle retailed $1,100 - $1,200
F&I per used vehicle retailed $900 - $1,000
5
About Pitcher Partners
Pitcher Partners is a full service accounting,
auditing and business advisory firm with a strong Pitcher Partners is a
reputation for providing quality advice to privately- national association of
owned, corporate and public organisations. independent firms.
Liability limited by a scheme
In Australia, Pitcher Partners has firms in Adelaide, Brisbane, Melbourne,
approved under Professional
Perth, Sydney and Newcastle. We collaboratively leverage from each other’s
Standards Legislation.
networks and draw on the skills and expertise of 1,200+ staff, in order to
service our clients.
Pitcher Partners is also an independent member of Baker Tilly International,
one of the top ten largest networks in the world by fee income. Our strong
relationship with other Baker Tilly International member firms, particularly
in Asia Pacific, has allowed us to open many doors across borders for our clients.
Our commercial services
to dynamic businesses
Our private wealth services
•
•
Estate Planning
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Worldwide revenue 2017 (USD)
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Financial essentials
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Advisory Services • Superannuation Strategies
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Sydney
240+
Total Sydney staff
31
Sydney partners
6
Firm Pitcher Partners has the
resources and depth of
expertise of a major firm,
locations but with a smaller firm
feel. We give our clients the
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service and attention.
That’s the difference.
MELBOURNE
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2017 Sydney City Regional Business Awards and the Accountant Awards Leader in Acquisition Growth Strategy - Australia
7Our global
Baker Tilly International is one of the world’s leading
networks of independently owned and managed
accountancy and business advisory firms united by a
commitment to provide exceptional client service.
reach
Every day, more than 33,000 people in 147 countries share experiences and
expertise to help privately held businesses and public interest entities meet
challenges and proactively respond to opportunities. International capability
and global consistency of service are central to the way we work.
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Global
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8Key
49
European Firms
20
Asia Pacific Firms
Local
Pitcher Partners is an independent member of
Baker Tilly International. Our strong relationship
with other Baker Tilly International member firms,
particularly in Asia Pacific, has allowed us to open
many doors across borders for our clients.
9Get in
touch...
John Gavljak Martin Booth
Partner – Automotive Partner – Automotive
+61 2 8236 7759 +61 2 8236 7887
john.gavljak@pitcher.com.au martin.booth@pitcher.com.au
John Taouil Nikki Mcmasters
Manager – Automotive Manager – Automotive
+61 2 8236 7739 +61 2 8236 7729
john.taouil@pitcher.com.au nikki.mcmasters@pitcher.com.au
MELBOURNE SYDNEY PERTH PITCHER.COM.AU
+61 3 8610 5000 +61 2 9221 2099 +61 8 9322 2022
partners@pitcher.com.au partners@pitcher-nsw.com.au partners@pitcher-wa.com.au
ADEL AIDE BRISBANE NEWCASTLE Pitcher Partners is an association of
independent firms. Liability limited
+61 8 8179 2800 +61 7 3222 8444 +61 2 4911 2000 by a scheme approved under
partners@pitcher-sa.com.au partners@pitcherpartners.com.au newcastle@pitcher.com.au Professional Standards Legislation.
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