The automotive industry is always varying, especially as consumer behaviors and the status of the economy continue to shift. The retail market of vehicles is hurting at the moment, so dealerships are looking to adjust business procedures to support the…

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5 COMMENTS

  1. What I’d like to see next is a report on the wages of the auto technicians at these dealers, are they also increasing since profits are up in dealerships? The technicians are the heart and soul of these dealer repair shops and for a long time wages have been lower than they should be for these men and women busting their bottom ends each day so these dealers can make good profits..

  2. This is the current average gross profit margin for any skilled trade or professional service(On the trailing twelve months basis gross margin in 4 Q 2019 grew to 38.67 %.) Why have dealers colluded through NADA to jack GPM’s up over 80% now?

  3. Shop rates have doubled since this article was posted but why do you car pigs think that a customer should pay a 600% mark up for an A level and 1,000% mark up for a C level?Remember that you cannot charge a premium price then substitute an inferior product or it is fraud and nobody more than doubles the cost of anything because it’s shitbag scammer and mark up percentages go exponential.
    “Dealers need to look at lower skill level technicians. There are several benefits: They’re a lot easier to steal from somebody else and they make you more money because they have a lower cost. You hire an A mechanic at $25 an hour, a C for $15 an hour, and your labor rate is $75 an hour. So you’re paying $25 to get $75 or paying $15 to get $75.”

  4. “Cox indicates that “unreasonable parts charges” are also a major deterrent for consumers” “Our Ford dealership is more like charge $165 and pay the tech $13.”Do you think colluding to push 90%+ margins or 1,269% cost mark ups on service labor might really piss some people off?

  5. Competitive margins are currently about 30% on parts and 40% on labor why are car dealers so far out of line?A 40% GPM is 80% over cost an 87% margin is 751% over cost or nearly 10 times what is considered acceptable.Nobody more than doubles the cost of anything because cost mark ups go exponential and they are clearly not paying technician values but dictating them.The current value of a technician is 61.33-71% of the stated retail shop rates whether flat-rate or hourly.The flat-rate system is also a competitive bidding process meaning that nobody can even suggest labor times,all they are legally allowed to do is ask the technicians what they are willing to perform the repairs for.Anything else is fixing cost,prices or wages or making an agreement with a third party which is collusion and a crime. https://www.rsmeansonline.com/References/LABORRATE/2-Year%202013%20Labor%20Rates/Repair%20Remodeling%20Labor%20Rates.PDF

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