Hey Chaxy,
This bit of information is worth its weight in G-O-L-D! Thanks for sharing it with us.
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Originally Posted by [b Quote[/b] ]If this sheet is to be believed then how do these dealers make money from such low margins ?? |
From your excel sheet, its about 4 to 5 % per car - A very very reasonable margin on a high-ticket/value item. Pretty much the norm within similar industries.
Buttttttttttttttttt the sale is only half the story. The real money comes in from:
1. Rs. 22,000 net from the Opel Corsa 1.4 GL. Did you know more cars sell without discounts bcoz of buyer ignorance?
2. Rs. 750 upwards - Commissions from the insurance company. You generally get insurance from the same dealer who sold you your car.
3. 1.5 % of financed amount - Commission from the finance company. Most people also get finance from the dealership itself. Thus if you avail of Rs. 400,000 financing for the Corsa, the dealer nets Rs. 6000 straight away.
4. Rs. 3000 upwards - Income from Thana registrations (In bombay dealerships). Note that this is taken in cash and thus tax-free.
5. $$$$ from over-priced accessories. Bombay dealerships charge about 2 - 3 grand for regular sunfilm, 15 grand for cd changers, 3 grand for wheel caps, 30 - 40 grand for leather seats etc. etc. HUGE source of profits.
6. Profits from sale of extended warranties.
7. Profits from the service centers. In a majority of the cases, service centers contribute more to the bank account than the dealerships. This case has strengthened with extended warranties, where you have to service your car at the authorised service center for extended coverage.
An ideal customer would contribute almost 50,000 to the dealerships kitty...and this is before he starts visiting the service station. Not bad for a 4.5 lac car, eh?
GTO