Operations

KPI Industry Benchmarks

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KPI
With so many KPIs, numbers can lose their meaning—make sure you know where you stand  

Mark Martincic, director of fixed operations at KEA Advisors, provided a list of industry benchmarks to provide guidance on what numbers you should be hitting—or better yet, surpassing—when it comes to common key performance indicators.   

Overall Dealership

Economic Profit Percentage: 20 percent

Economic Profit $: $0.00

Cash Flow as Return on Investment: 20 percent

Return on Sales: 4 percent

Absorption: 115 percent

Economic Profit Absorption: $0

Current Ratio: 150 percent

Debt to Equity Ratio: 3:01

Sales Gross Profit % total gross profit: 30%

Fixed gross profit % total gross profit: 70%

V/R: <10 days

A/R days supply: <25 days

W/R days supply: manufacturer cycle time plus five days

Sublet inventory: <2 days

WIP inventory: < 2 days

Open Ros: <2 days

Open truck sales (booked, not in accounting): <3 days

Contracts in transit:  F&I provided cycle time plus 2 days

RO cycle time: RH billed plus 2 days

Service Department:

Customer gross % : 73%

Warranty gross %: 72%

Internal gross: 72%

Total gross %: 68%

Personnel % gross: 40%

Semi fixed % gross: 17%

Fixed % gross: 13%

Total expense % gross: 70%

Net as % of gross: 30%

Return on technician investment: 110% x (ELR- average technician rate)

Technician productivity: 88%

Technician efficiency: 125

Technician proficiency: 110%

Unapplied time as % of sales: 2%

Service writer productivity: 80 hours billed per day

Policy as % of sales: 2%

Gross effective labor rate: Door rate plus $2

Hrs. per customer RO: 5-7

Customer parts to customer labor: $1

Fixed expense allocation: 42% (note: if dealership has a body shop, change to 28%)

RO open to first punch: 2 hours

RO first punch to last punch: <FRH plus two hours

RO last punch to close: < 2 days

Parts Department

Counter Gross %: 28%

Customer labor gross %: 32%

Warranty Gross %: 24%

Internal Gross %: 32%

Total Gross %: 29%

Personnel % Gross: 45%

Semi fixed % gross: 12%

Fixed % gross: 12%

Total expense % gross: 68%

Net as % of gross: 32%

Freight % Gross: 2%

Cost of sales per person: $30,000-$43,000 per month

Gross inventory turns: 8

True inventory turns: 6.4

Days supply of inventory: 45

Stock order performance: 80%

Level of service from inventory: 90%

Gross return on inventory investment: 232%

Net return on inventory investment: 74%

Inventory obsolescence: 20% over 9 months no movement

Fixed expense allocation: 33%

Variance of book to management report: 2%

Lost sales (pieces): 4 per counter person per day

Dirty cores: None over 30 days

Dirty core vs. liability: 100% credit vs. vendor availability

Body Shop

Customer gross %: 68%

Warranty gross %: 68%

Internal gross %: 68%

Total gross %: 65%

Personnel % gross: 50%

Semi fixed % gross: 17%

Fixed % gross: 13%

Total expense % gross: 80%

Net as % of gross: 20%

Gross profit per man hour invested: 123% x (ELR- average technician rate)

Technician productivity: 88%

Technician efficiency: 140%

Technician proficiency: 123%

Unapplied time as % of sales: 2%

Policy as % of sales: 2%

Fixed expense allocation: 14%

 

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