Peer Group: German Automotive Supplier/Manufacturer

Margin scheme: when you buy a used vehicle from a private person (no VAT on purchase), you can charge VAT only on your profit margin, not full sales price. Must document purchase conditions clearly. Not available for purchases with VAT (from businesses). Reduces customer-facing prices significantly. Track carefully—mixing schemes incorrectly creates tax liability. Each vehicle needs documented purchase type.

Selling to consumers: 1 year minimum Gewährleistung (can reduce from 2 years for used goods). This is warranty law, not optional. B2B sales can exclude Gewährleistung contractually. Common practice: inspect and document vehicle condition at sale, budget for warranty claims (typically 1-3% of revenue). Major claims can significantly affect profitability—consider additional insurance products for high-risk vehicles.

Per job: (Labor hours billed × rate) + (Parts sold × markup) - (Technician cost × actual hours) - (Parts cost) = Job margin. Key metric: billed hours vs. actual hours. Efficient technicians: ratio above 1 (bill more hours than clock hours). Parts markup typically 30-50%. Track by job type, technician, vehicle type. Low-margin jobs: either reprice or consider declining. Aggregate data identifies systematic margin issues.

Vehicles tie up significant capital. Calculate: purchase price + floor plan interest (if financed) + insurance + storage cost + reconditioning = Carrying cost. The longer a vehicle sits, the more it costs. Most dealers target 30-60 day turn. After 90 days, wholesale or aggressive pricing typically makes financial sense. Parts inventory: balance stock-outs vs. carrying cost. ABC analysis: tight control on high-value items.