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How The Drop In Sales Affected The Income Of Car Dealers In Russia

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How The Drop In Sales Affected The Income Of Car Dealers In Russia
How The Drop In Sales Affected The Income Of Car Dealers In Russia
Video: How The Drop In Sales Affected The Income Of Car Dealers In Russia
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Car dealer performance appraisal ASE analyzed key dealership performance indicators for the first six months of 2019 affecting profits.

The decrease in sales of new cars had an expected impact on the results of the work of dealer networks. In the first half of the year, when the market fell by 3.5%, retailers saw a sharp increase in the shelf life of new cars in warehouses, as well as expenses for sales departments. However, in the same first half of the year, car dealerships increased the cost of a standard hour, and also managed to increase the gross profit of the service and spare parts department

The data is based on the results of the dealer networks of ten car brands located in 11 economic regions. Three brands are premium, seven are mass market. For comparison, data for January-June 2018 are used.

Indicators that have gotten worse

How the drop in sales affected the income of car dealers in Russia
How the drop in sales affected the income of car dealers in Russia
How the drop in sales affected the income of car dealers in Russia
How the drop in sales affected the income of car dealers in Russia
How the drop in sales affected the income of car dealers in Russia
How the drop in sales affected the income of car dealers in Russia
How the drop in sales affected the income of car dealers in Russia
How the drop in sales affected the income of car dealers in Russia
How the drop in sales affected the income of car dealers in Russia
How the drop in sales affected the income of car dealers in Russia
  • Service coverage decreased by 3.4 points - to 77.2%. A decrease was noted in eight regions. The strongest is in the Central Black Earth Region: minus 14.3%. Two regions remained in positive territory: West Siberian (plus 2.4%) and North (plus 11.3%).

  • Number of cars sold per seller decreased by an average of 12 units - to 82 cars. The fall was recorded in seven regions, and the strongest - in the North, for 10 cars. In three regions, the indicator grew the most - in the Far East (plus 25 cars on average per seller). Dealers of the West Siberian region have maintained their last year's level.

  • Sales department expenses in relation to gross profit increased by 11.8% and amounted to 53.9%. The largest jump was recorded in the Northern Region: plus 18.4%. Only dealers in the East Siberian region showed a 0.6% decline.

  • Average storage time of a new car in a warehouse in all regions increased from 41 to 57 days on average. The cars are kept in the warehouses of dealers in the Far East region for the longest time - 2.5 months (plus 47 days to last year's figure).

  • Service department expenses in relation to gross profit on average increased to 53% (plus 2.1 points). Anti-record in the East Siberian region: plus 6.5%. Dealers in the two regions were able to cut costs - in the Far East by 0.8%, in the Central Chernozem by 0.7%.

Indicators that remained at last year's level

How the drop in sales affected the income of car dealers in Russia
How the drop in sales affected the income of car dealers in Russia
  • Parts department costs in relation to gross profit remained almost unchanged: in 2019 the figure was 19.8%, and in 2018 it was 19.7%. In two regions out of 11, expenses increased - by 0.9% in the Far East and by 1.3% in the Central one. Five more dealers managed to save money. It worked best in the North-West and East-Siberian regions: minus 2.8%.

Indicators that have become better

How the drop in sales affected the income of car dealers in Russia
How the drop in sales affected the income of car dealers in Russia
How the drop in sales affected the income of car dealers in Russia
How the drop in sales affected the income of car dealers in Russia
How the drop in sales affected the income of car dealers in Russia
How the drop in sales affected the income of car dealers in Russia
How the drop in sales affected the income of car dealers in Russia
How the drop in sales affected the income of car dealers in Russia
How the drop in sales affected the income of car dealers in Russia
How the drop in sales affected the income of car dealers in Russia
  • Overall service productivity (the rate of use of working time by employees) reached 91.2% (plus 2%). In nine regions, the numbers became more favorable. In the North Caucasus region, productivity has tripled and reached 102.8% - this is the best dynamics.

  • Average retail cost of a standard hour for 1 work order in Russia rose by 100 rubles - up to 3200 rubles. In the Central Black Earth Region, it increased by 500 rubles. A decrease was recorded in the Far Eastern and West Siberian regions - by the same 100 rubles.

  • Service gross profit increased by 2.6 points - up to 72.6%. Most noticeable - at the dealers of the North Caucasus region: there the indicator rose to 73% (plus 2.2%). In four regions, gross profit decreased: in Volgo-Vyatka (minus 0.9%), Povolzhsky (minus 0.3%), in North-West and Central Chernozem (minus 1.3%).

  • Gross profit from sales of spare parts increased, but insignificantly - by 0.3% (up to 25%). Dealerships in seven regions managed to increase their profits, and the best dynamics was noted in Central Chernozem: plus 2.7%.In the West Siberian region, gross profit decreased to 24% (minus 2.2 points). The indicators of 4 more regions remained at the last year's level.

  • Spare parts warehouse turnover decreased on average to two months (4 days less than a year earlier). The best dynamics was shown by dealers in the West Siberian region: minus 42 days. Dealers of the Central region are ahead of all: the warehouse turnover here is only 45 days.

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