Dealers continue to cut spending

SIOUX FALLS, S.D. – The average dealer tracked by Spader Business Management reported cutting expenses by 9 percent during the first nine months of the year ended Sept. 30, compared to the same period of 2007, from $2,047,529 to $1,858,128.

However, with total dealership sales down just over 20 percent during this 9-month period, net profits have shrunk as well. The average dealer reported a net profit of 2 percent of sales for the first nine months of the year, compared to a net profit of 4.3 percent of sales for the same period of 2007, a decline of 63 percent to $147,645.

The training and consulting firm tracks North American boat dealers, both large and small, to compile an average profile, then compares year-over-year trends in a number of different categories.

New boat sales for the first nine months of the year dropped 27 percent below the same period of 2007 to $4,320,447, while used boat sales were down 21.5 percent to $873,174.

New boat inventories in 2008 were down by 1.0 percent to $3,521,852, compared to 2007, while used boat inventories were up 5.7 percent to $407,176.

Unit gross margins were down 0.9 percentage points during the nine-month period to 16.7 percent; but total company gross margins were up slightly.

“Total dealership gross margin percentage is seven tenths of one percentage point above 2007 total dealership gross margin,” explained Spader in the statement. “However, this is primarily due to a greater percentage of revenue coming from higher margin areas, such as parts & accessories, service, marina and finance & insurance.”

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