Pitcher Partners Automotive
Non-Luxury edition 2016 and Luxury edition 2016
Key performance indicators for automotive retailers
ContentsAutomotive services 1
Non-luxury edition 2
Luxury edition 4
About Pitcher Partners 6
Automotive servicesWelcome to the 2016 Pitcher Partners Automotive Key Performance Indicators for Australian Automotive Retailers – Non-Luxury and Luxury EditionsThe Australian new car market has continued to experience strong sales, with official sales figures for the calendar year 2015 showing sales of 1.155 million units, representing a 3.8% increase on the sales for the 2014 calendar year (1.113 million units). This was off the back of strong organic growth in New South Wales, Queensland and Victoria.
The increase in new car sales continues to be driven by sales of passenger vehicles, with the Toyota and Mazda manufacturers continuing to generate the highest sales volumes in the calendar year. This has been a continued trend in the last few years. Further, sales of SUV vehicles have continued to increase, with SUV unit sales accounting for 35.4% of total new car sales in the calendar year. Australian manufactured vehicles represented 8.4% (2014 – 9.0%) of new cars sold in 2015.
The retail automotive industry has witnessed a marginal increase in dealership profitability since 2014, with average dealership profitability, measured by net profit as a percentage of sales, amounting to approximately 2.3%.
A key issue impacting the automotive industry in 2016 will be ASIC’s ongoing review of finance and insurance arrangements. ASIC has released two reports focusing on add-on insurance products sold to consumers when purchasing vehicles, with ASIC questioning the process surrounding the sale of these products, as well as the benefit and value to consumers. They are also continuing to focus on the flexible commission arrangements in the motor vehicle finance sector. The outcome of this could heavily impact retail automotive dealerships, specifically with reference to the sale of the products within the F&I departments.
Furthermore, the automotive industry is expected to be impacted by the proposed regulation surrounding parallel imports. The Australian Government announced in February its planned changes to the Motor Vehicles Standards Act 1989, which would effectively allow the private importing of a new vehicle from another country with comparable standards to Australia. The planned changes pose significant risks to both dealerships and consumers, with questions raised surrounding the servicing of these vehicles, as well as the resale value of the vehicles in comparison to Australian compliant vehicles.
Overall, we expect 2016 new vehicle sales to remain stable at the 1.16 million sales mark, in line with VFACTS forecasts, and these sales to be underpinned by low interest rates and strong employment numbers.
The market performance was largely driven by the following:
Strong competitiveness within the market, allowing for consumers to have access to a greater level of choice and access to high quality vehicles.
Record affordability levels, largely driven by manufacturer product offerings and franchisor incentives.
Low interest rates and strong employment within the Australian economy.
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Non-Luxury edition
The Big PictureDealership Profitability 2016 KPI Gross Contribution 2016 KPI
Net profit % sales 3-3.5% New 36%
Rent % gross 11% Used 18%
Admin & DP salary % gross 8% Front-end 54%
Gross % sales 13-15% Parts 12%
Monthly gross per employee $11,500-$13,000 Service 34%
Fixed absorption (minimum) 55% Back-end 46%
Finance and insurance income
20-25% of total gross
Vehicle OperationNew Vehicles 2016 KPI Used Vehicles 2016 KPI
Gross profit % 8-10% Gross profit % 12-14%
Gross profit per unit * $2,400-$2,600 Gross per unit $2,500-$2,600
Days’ supply 55-60 Days’ supply 65-70
Unit per sales staff per month 14 Unit per sales staff per month 13
Gross per sales person per month $37,500 Gross per sales person per month $35,000
Advertising per unit $235 Advertising per unit $255
Floor plan per unit $280 Floor plan per unit $180
Salaries & comm. per unit $700 Salaries & comm. per unit $730
Gross ROI 55-65% Used/new ratio 0.4
Aftermarket income per unit $350 Gross ROI 85-90%
* Includes holdback, bonuses and aftermarket Aftermarket income per unit $250
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Fixed OperationsParts 2016 KPI Service 2016 KPI
Gross profit % 23-25% Gross profit % total 66-68%
Days’ supply 45-50 Gross profit % labour 75-78%
Monthly gross per staff $16,000-$17,000 Monthly labour gross per tech $11,000-$12,000
$ sales per $ salary 17 Unapplied time % COS 5% max
Gross ROI 180-200% Non-chargeable salaries % gross 22-24%
Fixed absorption (minimum) 55% Back-end 46%
* Apprentices and foreman are weighted to arrive at an adjusted number of technicians
Chargeable to non-chargeable 2 to 1
Labour hours per retail RO 2.0 hours
Technician to service advisor 5 to 1
Parts / labour ratio $0.60
Fixed absorption (minimum) 55%
Finance and InsuranceNew Vehicles 2016 KPI Used Vehicles 2016 KPI
Finance penetration 35-40% Finance penetration 35%
Income per contract $2,300-$2,500 Income per contract $2,600-$2,800
Finance per retail unit $885 Finance per retail unit $900
Insurance per retail unit $200 Insurance per retail unit $200
F&I income per staff per month $55,000-$60,000
Units retailed per F&I staff per month
50-60
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Luxury edition
The Big PictureDealership Profitability 2016 KPI Gross Contribution 2016 KPI
Net profit % sales 3.5-4% New 46%
Rent % gross 11% Used 10%
Admin & DP salary % gross 5% Front-end 56%
Gross % sales 14-16% Parts 13%
Monthly gross per employee $12,000-$13,000 Service 31%
Fixed absorption (minimum) 50% Back-end 44%
Finance and insurance income
13-15% of total gross
Vehicle OperationVehicles 2016 KPI Used Vehicles 2016 KPI
Gross profit % 9-11% Gross profit % 12-13%
Gross profit per unit * $4,500-$5,000 Gross per unit $2,500-$3,000
Days’ supply 60-65 Days’ supply 65-70
Unit per sales staff per month 11 Unit per sales staff per month 11-13
Gross per sales person per month $50,000-$55,000 Gross per sales person per month $35,000-$40,000
Advertising per unit $500 Advertising per unit $500
Floor plan per unit $480 Floor plan per unit $300
Salaries & comm. per unit $1,100 Salaries & comm. per unit $800
Gross ROI 70% Used / new ratio 0.4
Aftermarket income per unit $350 Gross ROI 75-80%
* Includes holdback, bonuses and aftermarket Aftermarket income per unit $250
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Fixed OperationsParts 2016 KPI Service 2016 KPI
Gross profit % 24% Gross profit % total 70%
Days’ supply 50-60 Gross profit % labour 78%
Monthly gross per staff $18,000-$20,000 Monthly labour gross per tech $12,500-$13,000
$ sales per $ salary $18-$20 Unapplied time % COS 5% max
Gross ROI 180-200% Non-chargeable salaries % gross 30%
* Apprentices and foreman are weighted to arrive at an adjusted number of technicians
Chargeable to non-chargeable 2 to 1
Labour hours per retail RO 2.5 hours
Technician to service advisor 5 to 1
Parts / labour ratio $0.80
Fixed absorption (minimum) 50%
Finance and InsuranceNew Vehicles 2016 KPI Used Vehicles 2016 KPI
Finance penetration 30-35% Finance penetration 30-35%
Income per contract $2,200-$2,400 Income per contract $2,250-$2,450
Finance per retail unit $750 Finance per retail unit $800
Insurance per retail unit $170 Insurance per retail unit $200
F&I income per staff per month $55,000-$60,000
Units retailed per F&I staff per month
50-60
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About Pitcher Partners
Pitcher Partners is an accounting, auditing and rm providing personal service
and quality advice to high wealth individuals, small to medium public companies, large proprietary companies, local government and privately owned businesses.
rms located in Melbourne, Sydney, Perth, Adelaide, Brisbane and Newcastle, Pitcher Partners is purpose-built for the middle market. We have a strong reputation for providing personal service and quality commercial advice to our clients across a broad range of industries.
On 1 November 2015 Moore Stephens Sydney and Pitcher Partners Sydney merge to become a new Pitcher Partners t from greater infrastructure
support both locally and nationally through the Pitcher Partners association.
t from the collaboration and support that comes from the eight largest international accounting network - Baker Tilly International. Increased scale brings unlimited potential for growth, with exposure to new service off cant opportunities for both our clients and our staff .
Our commercial services to dynamic businesses
Financial essentials• Accounting and Business
Advisory Services• Audit, Risk Management
and Assurance• Internal Audit• Recovery, Turnarounds
and Insolvency• Tax advice and Compliance
Planning and growth• Business Consulting
and Commercial Advice• Business Performance
Improvement• Business Structuring• Corporate Finance• Corporate Governance• International Business Advisory• Investment Advisory Services• Succession Planning• Superannuation Services• Tax Consulting• Technology and IT Consulting• Valuations
Our private wealth services• Estate Planning• Family Offi ce Management• Investment Advisory Services• Philanthropy Services• Succession Planning• Superannuation Strategies• Tax Advice and Compliance
Industry specialisations• Retail• Professional services• Health and aged care• Manufacturing
t• Property and construction• Government and the public sector• Agriculture• Food and beverage• Hospitality
$3.8bnWorldwide revenue 2015 (USD)
141Countries
28,000+Partners and staff globally
100+Partners nationwide
1,200+People nationally
Pitcher Partners is a national association of
rms.Liability limited by a scheme approved under Professional Standards Legislation.
Sydney
240+Total Sydney staff
26Sydney partners
106
Firm locations
MELBOURNE
ADELAIDE
SYDNEY
BRISBANE
PERTH
NEWCASTLE
Pitcher Partners has the resources and depth of
rm, rm
feel. We give our clients the highest level of personal service and attention. That’s the diff erence.
Pitcher Partners is a national association rms. Liability limited by a
scheme approved under Professional Standards Legislation.
David Knowles
Alexis Kokkinos
2015
AUSTRALIAN ACCOUNTINGAWARDS 2015
FIRM
OF THE YEAR – LESS THAN $1B
N 2015
AUSTRALIAN ACCOUNTINGAWARDS 2015
GRADUATE PROGRAM OF THE YEAR 2015
AUSTRALIAN ACCOUNTINGAWARDS 2015
THOUGHT LEADER OF THE YEAR
TAX & ACCOUNTINGEXCELLENCEAWARDS 2015 Accounting Firm of the Year
WINNER
Accounting Firm of the Year
Indirect Tax Team of the Year
Tax Team of the Year
2 0 1 4F INAL I ST
7
Key
24Asia Paci�c Firms
28North America
Firms
62European Firms
36Middle East and
African Firms
15Latin America
Firms
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.
Every day, 28,000 people in 141 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.
Our globalreach
GlobalExperts across a wide range of industry and business sectors, each Baker Tilly International member firm combines high quality services and in-depth local knowledge.
165 independent firms come together across four geographic areas. Sharing knowledge and resources, our business approach brings together the power of the global network to deliver exceptional results to clients globally.
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Key
24Asia Paci�c Firms
28North America
Firms
62European Firms
36Middle East and
African Firms
15Latin America
Firms
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.
Every day, 28,000 people in 141 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.
Our globalreach
GlobalExperts across a wide range of industry and business sectors, each Baker Tilly International member firm combines high quality services and in-depth local knowledge.
165 independent firms come together across four geographic areas. Sharing knowledge and resources, our business approach brings together the power of the global network to deliver exceptional results to clients globally.
Key
24Asia Paci�c Firms
28North America
Firms
62European Firms
36Middle East and
African Firms
15Latin America
Firms
LocalPitcher 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.
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Get in touch...
Insight_AutomotiveKPIs_160317
MELBOURNE
+61 3 8610 5000 [email protected]
ADELAIDE
+61 8 8179 2800 [email protected]
SYDNEY
+61 2 9221 2099 [email protected]
BRISBANE
+61 7 3222 8444 [email protected]
PERTH
+61 8 9322 2022 [email protected]
PITCHER.COM.AU
NEWCASTLE
+61 2 4911 2000 [email protected]
Pitcher Partners is an association of independent firms. Liability limited by a scheme approved under Professional Standards Legislation.
John Gavljak National Head of Automotive
+61 2 8236 [email protected]
John TaouilManager – Automotive
+61 2 8236 [email protected]