Average Profit of Dealership per year

[dev.fb1982]

Guys,

I'm in limbo situation. I was discussing average profit per month or per year with my friends and one of them said it's around 36 crore per year in other words 3 crore per month, second said it's around 2 crore per month i.e. 24 crore per year and my stance is that it can't be more than a crore a month even crore is very difficult. We are now in bet and trying to verify numbers. Does anybody have idea what do they make on an average per year. And I'm talking about profit not revenue.

Thank you!

[VCheng]

Actual or declared for tax?

[dev.fb1982]

Any, it doesn't matter.

[capsat]

what is size of dealership?
what is average number of unit sales per week?
what is avg no of vehicles serviced per week?

a Toyota dealership in Karachi - their closing digits for June 30 2019 tax return was over 50 something of 9 digits.

so i do not doubt the claim of your friend(s)

• edited on request -

[dev.fb1982]

was that profit? or revenue?

[capsat]

read again .. it is declared for taxation returns. means base line profit for declared income is over & above 15% otherwise they may get flagged for audit

[capsat]

ok. do plain simple maths:

every dealership gets approx 15% of catch upon sale of a single unit of vehicle after tax. assuming an XLI is tagged at 2 million a unit. that makes approx 300,000 per unit. selling 5 units a week gets them net value of 1.5 million a week 6 mil a month 72 mil a year. that is documented sales.

avg service bill per vehicle is 7000 after tax. say 25 vehicles a week .documented 15 on cash undocumented.

drop approx 20% sustaining cost .. and you will strike decent digits.

[dev.fb1982]

it's not 15% it's max 2% for each unit sales.

[KamranAslam]

it's not 15% it's max 2% for each unit sales.

2% is the insurance value. and these authorize dealers living on 2% for each sale -- hilarious

[dev.fb1982]

Well you guys need to understand that when price tag is high, comission % is nominal.

[capsat]

Well you guys need to understand that when price tag is high, comission % is nominal.

are you re-writing rules of commerce?? when banks are offering 8 -9.5% who in right state of mind will work or invest in infrastructure to catch mere 2%

Higher the price tag, higher the margin... not many can afford to buy HIGH priced items.,

so such outlets distributors dealers has to forecast the sales to stay at par. The turnover, the no of units booked / sold determine the delivery schedule of vehicles booked at a dealership.