This metric, generally used inside automotive retail, represents the proportion of a dealership’s mounted bills coated by its service, components, and physique store departments. A calculation is carried out utilizing the overall gross revenue from these departments divided by the dealership’s whole mounted overhead prices. The ensuing proportion signifies the extent to which the service and components operations financially help the general enterprise. As an illustration, an consequence of 80% signifies that these departments cowl 80% of the dealership’s mounted bills.
The relevance of this indicator stems from its skill to gauge the monetary well being and operational effectivity of a dealership’s after-sales segments. A excessive proportion suggests a sturdy and worthwhile service and components operation, offering a buffer in opposition to fluctuations in new and used automotive gross sales. Traditionally, dealerships have acknowledged the significance of those after-sales areas as constant income streams, notably throughout financial downturns when automobile gross sales might decline. This metric gives a quantifiable solution to monitor and enhance their contribution.
