ARTICLE · 29 JANUARY 2013

What is the Maximum Absorption Potential for Your Dealership?

Moore Australia

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Dealers are encouraged to aim for 80% to 100% absorption, but the great majority achieve somewhere between 40% and 60%.

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Most dealers know about service and parts absorption*. Often dealers are encouraged to aim for 80% to 100% absorption, however the great majority achieve somewhere between 40% and 60%. The world is changing, dealer absorption levels have been falling for years.

What if you knew the maximum absorption potential for your dealership for the brands you market?

A key driver of absorption, with varying methods of calculation is 'service retention'. Is absorption related to service retention?

The answer is a definite YES. Figure 1 illustrates the direct relationship between service retention and absorption, based on our dealer financial modelling.

It makes sense doesn't it, retain more customers, after selling the vehicle and you will increase service and parts GP and therefore increase absorption. Great!

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