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Dealers losing out on profit potential through oil wastage

Managers at franchised dealerships could be missing out on significant revenue opportunities through poor management of their lubricant stocks.

Analysis by Castrol Professional indicates that the average dealer loses 11 per cent of potential oil revenues each year through wastage, equating to £1,450 profit per technician per annum.

The findings are the result of extensive field research by Castrol Professional’s Equipment Services team.

Its consultants have worked with over 550 dealerships in the UK over the past three years in the design, upgrade and refit of workshops.

In order to understand why and where this wastage is occurring, Castrol Professional has commissioned what it believes is the biggest research project of its kind into workshop management and oil usage at franchised dealerships.

The multi-stage project will draw on findings from over 250 telephone interviews with senior dealership decision-makers directly involved in purchasing oil and workshop equipment for their businesses.

The survey will be implemented, and the results announced, in stages throughout 2010.

The definition for wastage is oil bought into a dealership but not charged out.

This includes, but is not limited to, oil that is spilt, lost through leakage, mis-charged, stolen, used in dealer demonstrator vehicles and / or transferred between departments without having been recorded.

“Wastage actually hits a dealer’s pockets twice, once through the buy-in cost of the oil and then again through the missed profit potential," said Andrew Bosworth, equipment services manager, Castrol Professional.

"It is therefore alarming that many dealers are either unaware or unconcerned that they are seeing such a significant proportion of their oil lost through wastage.

"The motor trade is facing an uncertain market through the remainder of 2010, so it is imperative that all profit opportunities are maximised.”

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