Fix Fixed-Operations Faults, from Wards Auto.
If dealers ran their fixed operations using the same practices they use in their variable operations, they would see business increase.
One of the most important performance metrics dealers should track is their fixed coverage, or service absorption.
That represents on a percentage level how much back-shop operations cover overall dealership overhead. A hundred percent would be great. More than that would be awesome.
Unfortunately, this is an area where we continue to see a decrease. Year-to-date, it is 50%, according to the National Automobile Dealers Assn.
Yes, I understand that in many cases the recent costs of manufacturer-dictated facility improvement programs have negatively affected this. But that is only part of it.
I could take all of this space to list the reasons dealers are citing for this negative trend in service absorption.