Manufacturer programs can be tricky to manage when so much of the investment is getting tied up in wasted inventory. We recently put together our Benchmark and Best Practice numbers for our GM and Chrysler Clients from 2018 inventory numbers. Use these numbers as a guide when reviewing the health of your inventory.
General Motors RIM Program, with 27 GM stores being compared, had an average of 18.49% obsolete inventory on non-RIM Protected Parts. This number has doubled since 2013. The average GM Store has approximately 59% of its parts guaranteed, with the average store having approximately 3% of that guaranteed inventory in the 13 months to 16-month range as GM does not take back RIM Controlled Parts until 16 months with no sale or receipt.
Chrysler’s ARO Program, with 22 Chrysler stores being compared. ARO Guaranteed inventory value is 52% of the overall inventory investment. This is 7% lower than General Motors dealerships. And, the obsolete value of the non-ARO inventory is a whopping 23.47% of the non-ARO inventory value. However, Chrysler takes back ARO parts at 13 months and the Obsolete value there is less than 1% of the ARO investment.
The bottom is these programs are designed for the manufacturer, not for the dealer. It continues to amaze us that GM and FCA don’t realize how growing obsolescence in the dealer’s inventory chokes their ability to service the customer, and the manufacturer holds the dealer accountable with poor CSI or Fix it Right scores hurting the dealer in the long run.
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