Issue link: https://read.dmtmag.com/i/328305
FINANCIAL 8 • June 16, 2014 • Powersports Business www.PowersportsBusiness.com STOCK MARKET WATCH Stock Price Percent Company Ticker 5/23/14 Change Brunswick Corp. BC $43.24 4.7% Honda Motor Corp. ADR HMC $34.71 2.9% Cooper Tire & Rubber CTB $28.22 2.7% Carlisle Companies CSL $84.53 2.2% ADP ADP $78.85 1.7% Universal Technical Institute UTI $11.11 -7.4% MarineMax, Inc. HZO $15.25 -8.5% Arctic Cat, Inc. ACAT $37.27 -10.3% ARI Network Services, Inc. ARIS $2.74 -11.0% Spy Inc. XSPY $1.06 -22.9% POWERSPORTS BUSINESS WINNERS AND LOSERS www.PowersportsBusiness.com FINANCE Powersports Business • June 16, 2014 • 9 minutes per presentation), the business man- ager spends his/her time presenting products and options for customers. Add another three to six hours per month for handling objections. THAT IS IT! $4,000-$12,000 per month for 6-12 hours of presentations. That's an average of nearly $1,000 per hour for the right business manager. Of course there is much more to the job of business manager than presenting and handling objections, but that's really where the rubber hits the road. AN OFFICE FOR PRIVACY Your customers require it, and your business manager can't concentrate without it. Your customers share highly confidential information with your business managers, such as social security numbers, information about credit bureaus, possibly some embarrassing MARKET WATCH Change 5/23/14 from 5/2 % Change Powersports Business Index 291.826 -10.91 -3.60% Dow Jones Index 144.439 0.81 0.57% S&P 500 Index 129.354 1.32 1.03% Source: Wells Fargo Securities LLC 80 100 120 140 160 180 200 220 240 260 280 300 320 10/14/13 11/8/13 12/9/13 1/6/14 1/27/14 2/25/14 3/14/14 4/11/14 5/2/14 5/23/14 PSB INDEX DOW JONES INDEX S&P 500 INDEX STOCK MARKET ACTIVITY * The Powersports Business Index has been adjusted to reflect the addition of TCF Financial Corporation (TCB) on 2/25/14. The single step in the overall sales and finance process that impacts dealer profitability the most is an effective menu presentation. THE BUSINESS What business are you in? A Harley dealer? Multiple brands and segments? PWC only? ATVs mainly? One majority franchise? Are you the owner or general manager? How do much of the selling do you do? Or do you have several salespeople working the show floor? Are you the only store in town, or do you have multiple competitive dealerships? How many units do you sell in a good month? How many in a slow month? And what is your average sale price per vehicle? Is your dealership in the right market- place, and does it have the resources for an F&I department? Many times the answer to most of the questions above does not even matter. Most dealers visited tell me they don't have an F&I department or don't use a menu because of some of the situations that result from the questions above. In actuality, the answer lies in the numbers an F&I depart- ment would generate. Example 1: Average units sold per month: 20 Average price per unit: $15,000 Average F&I profit with a menu: $20,000 Average F&I PVR: $1,000 Costs and commissions: $8,000 F&I net profits: $12,000 x 12 = $144,000 Example 2: Average units sold per month: 60 Average price per unit: $6,000 Average F&I profit with a menu: $20,000 Average F&I PVR: $333 Costs and commissions: $8,000 F&I net profits: $12,000 x 12 = $144,000 In either case, using a menu presentation in your F&I department absolutely pays off, regardless of whether it averages $1,000 per vehicle retail (PVR) or $333 PVR. It's still $12,000 in income after commissions and expenses per month. The biggest difference in the two examples above is in the price per DEALER FINANCIAL SNAPSHOT MAY 2014 Overall, 1,426 APD Lightspeed dealers saw a 6.3 percent increase in Same Store Sales in May, when compared to the year-ago month. Parts was the only department to see a decrease nationwide, down 0.4 percent from May 2013. Four of the five U.S. regions were up, with the South seeing the larg- est overall increase, up 12.4 percent. The Midwest was down in parts and major units, leading to a 1.8 percent decrease overall. PARTS SALES Nationally, 728 dealers were up in parts, and 698 were down. SERVICE SALES In service, 792 dealers were up, while 562 were down. MAJOR UNIT SALES In sales, 729 dealers were up, and 479 were down. NORTHWEST 0.0% Parts Department 1.8% Service Department 12.9% Major Units 11.1% Overall MIDWEST -2.1% Parts Department 4.3% Service Department -2.7% Major Units -1.8% Overall NORTHEAST -0.2% Parts Department 4.2% Service Department 2.3% Major Units 2.3% Overall SOUTH 2.5% Parts Department 6.2% Service Department 14.1% Major Units 12.4% Overall WEST -2.1% Parts Department 7.5% Service Department 10.0% Major Units 8.1% Overall UNITED STATES -0.4% Parts Department 5.4% Service Department 7.3% Major Units 6.3% Overall FOR MORE ON THE SAME STORE SALES DATA For more information on this report and other industry data, contact: adplightspeed.com/dataservices Menu presentation absolutely pays off F&I SOLUTIONS BRIAN GALLMEIER unit — $15,000 vs. $6,000. Without a menu presentation, most of the time, the PVR will be significantly less in either case. Without sending deals into banks for approvals using indirect lending, it's extremely difficult to sell optional F&I products for a high PVR. Penetration rates may go from 100 percent (at least one product sold per sale on average) down to 20 percent. At an average product profit of between $300 and $800, depending on products, there's a difference in gross profit of up to $15,000, or $750 PVR. Can your dealership afford this? Obviously, in Example 2, if average units sold per month were 20, and the average price per unit was still $6,000 or below, F&I profit would be cut by 66 percent, making compensation for a full time F&I manager difficult. But a half-time business manager is better than no business manager. THE BUSINESS MANAGER The business manager should have the fol- lowing traits: outgoing personality, enough flexibility to have something in common with all buyers, attention to detail, quick with num- bers, decision maker, must get along with all personalities in the dealership, integrity/char- acter, attitude and ATTITUDE, believability and strong presentation skills. For three to six hours per month (seven FOREIGN CURRENCY EXCHANGE 5/23/14 1 Month Ago 6 Months Ago Year Ago Annual Price Price %Change Price %Change Price %Change High Low Australian Dollar 1.08 1.08 -0.5% 1.08 -0.2% 1.03 -4.8% 1.03 1.15 British Pound 0.59 0.60 0.4% 0.59 0.1% 0.66 11.8% 0.59 0.67 Canadian Dollar 1.09 1.10 1.5% 1.08 -0.3% 1.03 -4.9% 1.02 1.13 Euro 0.73 0.72 -1.4% 0.73 -0.1% 0.78 5.7% 0.72 0.78 Indian Rupee 58.36 61.05 4.6% 59.01 1.1% 55.64 -4.7% 55.61 68.14 Indonesian Rupiah 11,615 11,630 0.1% 11,578 -0.3% 9,772 -15.9% 9,772 12,260 Japanese Yen 101.82 102.39 0.5% 101.91 0.1% 101.44 -0.4% 94.22 105.11 Malaysian Ringget 3.21 3.27 1.7% 3.22 0.2% 3.03 -5.5% 3.03 3.35 Phillipine Peso 43.66 44.72 2.4% 43.77 0.3% 41.67 -4.5% 41.60 45.40 Singapore Dollar 1.25 1.26 0.5% 1.26 0.3% 1.27 1.1% 1.24 1.28 South Korean Won 1,024.55 1,039.55 1.5% 1,023.25 -0.1% 1,128.57 10.2% 1,021.95 1,161.35 Taiwan Dollar 30.11 30.28 0.6% 30.12 0.1% 29.97 -0.5% 29.36 30.59 Thailand Bhat 32.60 32.35 -0.8% 32.64 0.1% 29.93 -8.2% 29.93 33.13 Note: A positive percent change reflects a weakening of the U.S. dollar and a strengthening of the foreign currency. 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