The spring selling season is here. Through March, the light-vehicle industry is up 3.9% over the same period in 2003, thanks to the truck market.

The prospects for continued increases appear strong considering current days' supply levels of new vehicles, market share concerns of domestic auto makers, consumer negative equity concerns and last, but certainly not least, the customer's addiction to rebates.

The easiest (or, should I say, least difficult) time to bring your numbers into line is when you are selling cars and trucks and your fixed operations business is strong. That's often in the spring and summer.

We know gross cures a lot of ills, and, during this time of improved grosses, we have the chance to identify goals, form a game plan and then implement actions that will positively affect our bottom lines.

There is a quote I often recall: “A goal without a plan is only a dream.”

The following benchmark information, which is extracted from our NCM client database, is offered as a reference or comparison for you when determining a goal and creating plans of action.

What percentage of your total departmental gross comes from each department? Are we maximizing our potential, or are we more highly dependant on one department?

Departmental Gross Contribution As Percentage of Total Dealership Departmental Gross1:
Domestic Import Highline My Store
New 33.1 % 40.1 % 47.5 % %
Used 25.6 % 22.0 % 13.6 % %
Parts 15.8 % 14.1 % 14.6 % %
Service 20.2 % 22.4 % 23.2 % %
Body 8.0 % 8.2 % 4.9 % %
1Departmental gross contribution franchise benchmarks include dealerships with and without body shop operations. Independent of one another, contribution percentages equal 100%.

I'm aware one department can very quickly change your gross percentage contribution numbers by suffering a decline in business. I'm not considering this as an option.

We've just compared our percentage of gross contribution by department, now what about the expense measurement? What percentage of your total departmental expense is represented in each department? Remember, this number is highly dependent on your individual expense allocation.

Department Expense As Percentage of Total Dealership Departmental Expense:
Domestic Import Highline My Store
New 33.4 % 38.6 % 38.9 % %
Used 25.4 % 22.9 % 17.5 % %
Parts 12.1 % 13.1 % 12.8 % %
Service 22.0 % 22.7 % 27.9 % %
Body 6.8 % 2.5 % 2.4 % %

One of, or probably the most discussed key measurement is support personnel compensation. For clarification purposes, in this example, NCM considers support personnel to be everyone other than mechanical technicians, body technicians, new and used vehicle sales personnel and F&I sales personnel (producers). Following are the expense percentages each category represents as a percentage of total dealership gross.

Key Compensation Expense Measurements As Percentage of Total Dealership Gross (Excluding Other Income):
Domestic Import Highline My Store
Supervision 11.5 % 11.4 % 8.6 % %
Clerical 3.2 % 3.1 % 2.4 % %
Other Salary/Wage 11.4 % 10.0 % 8.4 % %
Employee Bonus .5 % .5 % .5 % %
Support Salary Group Total 26.6 % 25.0 % 19.9 % %

These reference numbers are only part of the equation, but they can help determine positive directions if you decide changes are required.

Good selling!

Tony Noland (tnoland@ncm20.com) is the president and CEO of NCM Associates, Inc.